Battery-maker Northvolt files for bankruptcy

Northvolt AB has filed for bankruptcy in Sweden, following failed talks with investors about a potential rescue package.

“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 says.

“Further to this backdrop, 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 also tried a Chapter 11 restructuring process in the US, and “despite liquidity support from our lenders and key counterparties, the company was unable to secure the necessary financial conditions to continue in its current form”.

The company says it is seeking financing to continue operating during the Swedish bankruptcy process.

“Following the filing, a Swedish court-appointed trustee will now oversee the process, including the sale of the business and its assets and settlement of outstanding obligations,” says Northvolt which 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, the company says.

“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.”

 “This is an incredibly difficult day for everyone at Northvolt,” says board interim chairman Tom Johnstone.

“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.

“The outcome is especially hard considering not only the level of engagement and interest we held with potential partners and investors in recent months, but also the clear improvement and upwards trajectory that we have been seeing in Northvolt’s production in Skellefteå, where cell output from serial production lines has doubled and we have secured a 50% improvement in production yield since September.”

Northvolt says it delivered its first one million battery cells to a European customer. “These battery cells are produced with 100% fossil-free energy and represent the most sustainable products of their type in the world…. based on technology developed in Sweden and invented at Northvolt Labs.”

Johnstone says it’s key for Europe to have a homegrown battery industry.

“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.”

Further updates will be provided by the trustee as the process progresses, says Northvolt, adding it was founded in 2016 as Europe sought to reduce reliance on Chinese batteries for EVs.

Early backers included Volkswagen and BlackRock.

The Financial Times says Swedish truck maker Scania, Northvolt’s primary customer, injected fresh capital into the business recently but has now secured supplies from separate battery makers.