Swedish battery maker Northvolt, once hailed as Europe’s top contender in the electric vehicle (EV) battery race, is now grappling with financial turmoil. On Thursday, the company filed for Chapter 11 bankruptcy protection in the U.S. as it struggles to stabilise its finances after months of production setbacks and dwindling funds.
Founded in 2016 by former Tesla executives, Northvolt aimed to become a leading producer of lithium-ion batteries for EVs, attracting significant investments along the way. It raised more than USD 10 billion in equity, debt, and public financing, with major backers including Volkswagen (21% stake) and Goldman Sachs (19%).
Northvolt’s trajectory took a dramatic turn from rapid expansion to crisis within months. In 2017, the company announced plans for a USD 4 billion lithium-ion battery gigafactory, Northvolt Ett, and attracted major partners such as BMW and Scania. By 2021, it had secured major orders, including a 10-year, USD 14 billion deal with Volkswagen. However, production issues soon began to take a toll, culminating in missed targets and delayed deliveries.
In 2023, the company struggled to maintain its pace. A planned initial public offering (IPO) was postponed, and Northvolt announced major restructuring plans. By September 2024, the company had halted its expansion in Canada and Germany, laid off 1,600 workers in Sweden, and halted plans to produce key battery components in-house. Production at its flagship Northvolt Ett plant also remained well below capacity.
As of October, Northvolt’s financial situation had worsened. A subsidiary filed for bankruptcy, and internal documents revealed the company’s significant production shortfalls. Attempts to secure emergency funding of USD 200 million were far below the USD 1.4 billion the company had initially sought.
With its future uncertain, Northvolt’s Chapter 11 filing seeks to reorganise the company and secure additional funding to keep operations going. The filing marks a dramatic fall for a company that once embodied Europe’s ambition to rival Asia in the electric vehicle revolution.