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Northvolt, the Swedish maker of battery cells for electric vehicles, has filed for Chapter 11 bankruptcy protection in the US, dealing a blow to Europe’s hopes that its most developed battery player would reduce western carmakers’ reliance on Chinese rivals.
Northvolt said it had enough cash to support operations for only about a week and it had secured $100m (£80m) in new financing for the bankruptcy process. It said operations would continue as normal during the bankruptcy.
“Northvolt’s liquidity picture has become dire,” the company said in its Chapter 11 petition, filed in a bankruptcy court in Houston. Northvolt, which has operations in California, has about $30m in cash and about $5.8bn of debts.
The company, which employs about 6,600 staff across seven countries, expects to complete the restructuring by the first quarter of 2025.
In September, Northvolt said it would cut 1,600 jobs in response to “headwinds” blowing through the electric car industry.
Within months, Northvolt transformed from Europe’s best shot at a homegrown EV battery champion to a company struggling to stay afloat by slimming down, hobbled by production problems, the loss of a big customer and a lack of funding.
Europe has been hoping that Northvolt would reduce western carmakers’ reliance on Chinese rivals such as the battery maker CATL and the EV and battery maker BYD.
Northvolt said the $100m was part of $245m in financing support for the bankruptcy. The Swedish truck maker Scania, a shareholder and its biggest customer, has said it will loan $100m to Northvolt to support the manufacturing of EV battery cells in Skellefteå, northern Sweden.
Tom Johnstone, the interim chair of Northvolt’s board, said: “This decisive step will allow Northvolt to continue its mission to establish a homegrown, European industrial base for battery production.” He also noted the support the company had received from lenders and customers.
As part of the restructuring, Northvolt would evaluate proposals for new money investment from strategic and financial investors, as well as existing lenders, shareholders and customers, he said.
The investment group Vargas, a co-founder of Northvolt and one of its largest shareholders, said the bankruptcy would allow the company to address financial challenges and maintain its competitive edge in producing high-performance battery cells.
Northvolt has led a wave of European startups investing tens of billions of dollars in battery production to serve the continent’s automakers as they switch from internal-combustion engines to EVs.
But EV demand is growing at a slower pace than some in the industry had projected, and competition remains stiff from China, which controls 85% of global battery-cell production, according to International Energy Agency data.
The Swedish deputy prime minister, Ebba Busch, said on X that the government continued to support the EV battery industry and it hoped the restructuring would help turn around Northvolt’s fortunes.
