Sad news out of Stockholm today for the future of sustainable batteries. Following an exhaustive effort to explore all available means to secure a viable financial and operational future for the company, Northvolt announced that it has filed for bankruptcy in Sweden.
In November, the company filed for Chapter 11 bankruptcy protection in the US, and despite liquidity support from its lenders and key counterparties, was unable to secure the necessary financial conditions to continue in its current form.
The Board therefore, determined that this is the only available solution while the company pursues all realistic options to obtain financing to continue operating during the Swedish bankruptcy process.
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 last year 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. In November the company announced that it had secured $100 million in new financing for the bankruptcy process, while operations continue as normal.
A statement by the company highlighted the compounding challenges affecting the sector in recent months, which include, “rising capital costs, geopolitical instability, subsequent supply chain disruptions, and shifts in market demand.”
It further states:
“the company has faced significant internal challenges in its ramp-up of production, both in ways that were expected by engagement in what is a highly complex industry, and others which were unforeseen.”
Northvolt is working closely with relevant authorities, trade unions, and partners to ensure that employees receive the support and information they need during this transition.
Tom Johnstone, Interim Chairman of Northvolt’s Board of Directors, commented:
“This is an incredibly difficult day for everyone at Northvolt. We set out to build something groundbreaking — to drive real change in the battery, EV and wider European industry and accelerate the transition to a green and sustainable future.”
Johnstone emphasized the high level of engagement and interest from potential partners and investors in recent months, suggesting that deals in the works may have fallen through.
He stated:
“Through the recent months, Northvolt has refocused its operations and achieved several achievements. We ramped up production to meet customers’ needs, reduced operational cash outflow by 55%, made tough decisions to pause or delay expansion plans, completed divestitures and ultimately delivered our first one million battery cells to a European customer.
At Northvolt's production in Skellefteå, cell output from serial production lines doubled and with a 50 per cent improvement in production yield since September.
“We are hopeful that the outreach we have undertaken with potential investors during the Chapter 11 process will accelerate identifying the necessary financing to allow continued trading under the Swedish bankruptcy process.
The passion, dedication, and innovation of our team has been nothing short of extraordinary, and we deeply regret that there is not a different path forward.
I want to extend my strongest gratitude to our employees, customers, suppliers, investors, and partners who believed in Northvolt’s mission. I also want to extend the same gratitude for all the support we received from the communities in Skellefteå and Västerås.”
Tom Johnstone concluded:
“We are hopeful that the foundation we built — the technology, the expertise, and the commitment to sustainability — will continue to drive change in the industry.”
Following the filing, a Swedish court-appointed trustee will now oversee the process, including the sale of the business and its assets and sthe ettlement of outstanding obligations.
Northvolt has nominated Mikael Kubu as Trustee. The entities Northvolt AB, Northvolt Ett AB, Northvolt Labs AB, Northvolt Revolt AB, and Northvolt Systems AB filed with the Swedish court.
Northvolt Germany and Northvolt North America are not filing for bankruptcy in their respective jurisdictions. As wholly owned subsidiaries of Northvolt AB, any decisions regarding these entities will be made by the court-appointed trustee of Northvolt AB in consultation with the Group’s lenders at the appropriate time.
As the bankruptcy process unfolds, the court-appointed trustee will determine the future of Northvolt’s businesses and their assets, including technology and production facilities.
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