Northvolt Declares Bankruptcy as European EV Battery Industry Struggles

The Swedish battery maker, once a symbol of European innovation, faces a liquidity crisis, production challenges, and declining EV demand.

• Northvolt filed for Chapter 11 bankruptcy protection in the U.S., citing nearly $6 billion in debt and only $30 million in cash reserves, equivalent to one week of operating costs.
• CEO and co-founder Peter Carlsson has resigned, acknowledging over-ambitious expansion plans, but will remain as a senior adviser and board member.
• The company plans to focus on its Swedish gigafactory and two postponed projects in Germany and Canada while seeking $1 billion to $1.2 billion in new funding to restructure operations.
• Declining EV sales in Europe, competition from lower-cost Chinese batteries, and operational difficulties have severely impacted Northvolt's ability to meet production and financial targets.
• Major investors, including Volkswagen, Canadian pension funds, and Goldman Sachs, face potential losses, while the restructuring process is expected to conclude in early 2025.

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