- Northvolt, a Swedish-based lithium-ion battery manufacturer backed by Volkswagen Group and others, has filed for bankruptcy protection in the United States.
- The company was hailed as one of Europe’s biggest hopes against China’s EV battery supremacy.
- Northvolt’s financial situation deteriorated in a matter of months.
Swedish-based Northvolt, which was seen as one of Europe’s best shots at fighting off China’s electric vehicle battery supremacy, filed for bankruptcy yesterday. The company said in its Chapter 11 petition filed in the United States Bankruptcy Court for the Southern District of Texas that its “liquidity picture has become dire.”
Northvolt, which has operations in California, has roughly $30 million in cash, which is enough to support it for only about a week. Meanwhile, it has $5.8 billion in debt. The Chapter 11 bankruptcy protection will enable it to continue operations at a reduced scale and pay employees. The battery maker has also secured a $100 million loan from truck maker Scania, its biggest customer and one of the shareholders. Northvolt said the new loan is part of $245 million in financing support for the bankruptcy.
The restructuring process is expected to be completed in the first quarter of 2025. Northvolt Ett, the battery maker’s flagship gigafactory in Skellefteå, Sweden, and Northvolt Labs in Västerås, Sweden will remain operational during the restructuring process. 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, the company said.
“This decisive step will allow Northvolt to continue its mission to establish a homegrown, European industrial base for battery production,” said Tom Johnstone, interim Chairman of the Board. “Despite near-term challenges, this action to strengthen our capital structure will allow us to capture the continued market demand for vehicle electrification. We are likewise pleased by the strong support we have received from our existing lenders and our customers.”
Northvolt manufactures lithium-ion battery cells used for electric vehicles and stationary storage. Volkswagen Group is its largest shareholder after an investment of roughly $1 billion. BMW Group was also briefly part of the investment group, pledging to pay $2 billion, but the deal fell through after BMW claimed Northvolt failed to deliver batteries on time.
The Swedish battery maker has two fully functional factories, one in Sweden and the other in Poland. Several other facilities are planned. The first customer deliveries were made in 2022, with the main factory in Sweden reportedly capable of producing 60 gigawatt-hours worth of batteries per year, enough for 1 million EVs. However, Northvolt said in its bankruptcy filing that it currently can produce 300,000 batteries per year.