Once hyped as a potential cornerstone for an expanded European battery industry, Swedish battery maker Northvolt on Wednesday announced that it was filing for bankruptcy in its home country.
“Like many companies in the battery sector, Northvolt has experienced a series of compounding challenges in recent months that eroded its financial position, including rising capital costs, geopolitical instability, subsequent supply chain disruptions, and shifts in market demand,” the company said in a press release. “Further to this backdrop, the company has faced significant internal challenges in its ramp-up of production.”
Rendering of Northvolt Six battery factory in Quebec, Canada
In recent months, Northvolt has made several attempts to shore up its financial position, including filing for Chapter 11 bankruptcy in the U.S. and cutting costs throughout its business. However, the company said it was not able to secure the additional funding it needed to continue operating.
In accordance with Swedish law, a court-appointed trustee will now oversee the sale of Northvolt’s business and assets in order to settle the company’s outstanding financial obligations.
Volvo and Northvolt partner on battery development and production
Northvolt opened its first battery factory in Sweden in 2021, and that year claimed to be making cells with 100% recycled nickel, manganese, and cobalt. Battery-supply deals with BMW and Volvo soon followed, as well as plans for additional factories, stoking hopes that Northvolt could grow into a local competitor to established battery firms serving European automakers.
But that first plant never reached full production capacity, Reuters reported last year, around the time that BMW nixed its battery-supply deal with Northvolt, estimated to be worth about $2 billion. Layoffs followed, along with the resignation of CEO Peter Carlsson.
