Northvolt Files for Bankruptcy, Raising Concerns Over €600M in Public Funds

The Swedish battery maker's financial troubles put taxpayer-backed loans at risk, but officials remain hopeful for restructuring and repayment.

Northvolt has filed for Chapter 11 bankruptcy in the U.S., initiating a restructuring process to address financial challenges, including production issues and competition from Chinese manufacturers.
The German government and the state of Schleswig-Holstein jointly guaranteed €600 million in loans for Northvolt's battery factory project in Heide, which is not directly impacted by the bankruptcy filing.
Officials, including Chancellor Olaf Scholz and Economy Minister Robert Habeck, defend the subsidies as critical for building European battery production capacity and reducing reliance on China.
Critics, including opposition parties, have labeled the situation a failure of government subsidy policy, with calls for a parliamentary inquiry into the financial oversight of the project.
Despite the bankruptcy, construction on Northvolt's Heide factory continues, and there is cautious optimism that the restructuring could attract new investors and enable loan repayment.