BY Fraser Tennant
Despite exhaustive efforts to secure a viable financial and operational future, Swedish battery maker Northvolt has filed for Chapter 11 bankruptcy in Sweden.
The company, like many in the battery sector, has experienced a series of challenges in recent months that eroded its financial position, including rising capital costs, geopolitical instability, subsequent supply chain disruptions and shifts in market demand.
Northvolt has also 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.
The company sought Chapter 11 bankruptcy protection in the US in November 2024, but despite liquidity support from its lenders and key counterparties, it was unable to secure the necessary financial conditions to continue in its current form.
As a result, the board of directors at Northvolt determined that Chapter 11 bankruptcy in Sweden was the only available solution while the company pursues all realistic options to obtain financing to continue operating during the Swedish bankruptcy process.
“This is a difficult time for everyone at Northvolt,” said Tom Johnstone, interim chairman of the board at Northvolt. “We set out to build something groundbreaking – to drive real change in the battery, electric vehicle and wider European industry and accelerate the transition to a green and sustainable future.”
This future includes the improvement and upwards trajectory of Northvolt's production in Skellefteå, where cell output from serial production lines has doubled and the company has secured a 50 percent improvement in production yield since September 2024.
“Northvolt has come a long way, and we are beginning to see the real outcomes of our work, including production line improvements that helped customers bring more electric vehicles to the market more quickly,” continued Mr Johnstone. “It remains key for Europe to have a homegrown battery industry, but it is a marathon to build such an industry. It needs patience and long-term commitment from all stakeholders.”
The company is hopeful that the outreach it has undertaken with potential investors during the Chapter 11 process will accelerate identifying the necessary financing to allow continued trading under the Swedish bankruptcy process.
Mr Johnstone concluded: “We are hopeful that the foundation we built – the technology, the expertise and the commitment to sustainability – will continue to drive change in the industry.”