Swedish battery cell marker for EVs Northvolt has filed for Chapter 11 bankruptcy protection in the US, placing a blow in Europe’s ambition to divest its dependency on Chinese battery manufacturing.
Chapter 11 provides the company with the financing to focus on operational improvements and supporting customers, while allowing for restructuring, reorganisation, and fundraising to secure a long-term competitive positioning.
Northvolt Germany and Northvolt North America, subsidiaries of Northvolt AB with projects in Germany and Canada, are financed separately and will continue to operate as usual outside of the Chapter 11 process as key parts of Northvolt’s strategic positioning.
The company is also announcing that Peter Carlsson will take on a role as Senior Advisor and step aside from his role as CEO. He also remains a Member of the Board.
Northvolt was founded in 2016 by two former Tesla executives, Peter Carlsson and Paolo Cerruti. It raised over $13.8 billion. However, it has struggled against falling demand for electric cars and fierce competition from Chinese manufacturers.
It laid off 1,600 workers in September and was found earlier this month to fall short of its production goal of 100,000 cells per week, only managing to ship around 20,000. It lost a €2 billion contract with BMW in June,
Northvolt Ett, the company’s flagship battery gigafactory in Skellefteå, Sweden, and Northvolt Labs in Västerås, Sweden will remain operational however, Northvolt suspected production at one of the two manufacturing buildings at the Skelleftea plant in late October, cutting costs by ending its 24/7 production cycle earlier this month.
According to Northvolt, the company has enough cash for a week of operations but has secured $100 million in new financing for the bankruptcy process. Operations will continue as normal during the bankruptcy.
The company expects to complete the restructuring by the first quarter of 2025.
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