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Northvolt, a Swedish electric car battery maker once hailed as a cornerstone of Europe's efforts to rival Asia and the United States in battery cell production, has filed for bankruptcy in Sweden. The company, founded in 2016, struggled with debt, slow demand, and production delays, ultimately failing to secure the necessary financing to continue operations. The setback follows BMW's cancellation of a €2 billion ($2.2 billion) order in May 2024.
Northvolt said in a statement Wednesday that despite pursuing "all available options to negotiate and implement a financial restructuring ... the company was unable to secure the necessary financial conditions to continue in its current form". Northvolt applied for Chapter 11 bankruptcy protection in the United States in late November to enable it to restructure its debt and reorganise its business.
The battery maker said in US filings that it owed $5.8 billion.
Northvolt said "a Swedish court-appointed trustee will now oversee the process, including the sale of the business and its assets and settlement of outstanding obligations."
In January, shareholders agreed at an extraordinary general meeting to allow the financially-strained company to continue operating. Northvolt's two biggest shareholders are German carmaker Volkswagen -- also in financial difficulty -- and US investment bank Goldman Sachs.
"Like many companies in the battery sector, Northvolt has experienced a series of compounding challenges in recent months that eroded its financial position," the company said. It cited "rising capital costs, geopolitical instability, subsequent supply chain disruptions, and shifts in market demand".
The battery maker stressed that in its attempts to secure financing it had found "significant traction with potential partners and interest from investors". "However, with limited time and financial resources available, the company was unable to conclude the necessary agreements to secure its future," Northvolt said.
It also said that its German and North American subsidiaries were not filing for bankruptcy in their respective jurisdictions.
