Swedish Battery Firm Northvolt Files for U.S. Chapter 11 Bankruptcy Protection
Northvolt, a Swedish battery company, filed for U.S. Chapter 11 bankruptcy protection on Thursday, with CEO Peter Carlsson stepping down the following day.
According to Reuters and other media, Northvolt needs to raise between $1 billion and $1.2 billion to resume full operations. The company revealed that it only had enough cash to sustain operations for about a week and had secured $100 million in financing to navigate through the bankruptcy process.
In its Chapter 11 filing, Northvolt aims to complete the necessary restructuring by the first quarter of 2025. Carlsson stated that this process will give the company the opportunity to reorganize and scale up operations while honoring commitments to customers and suppliers.
Carlsson will continue to serve on the company’s board in a new senior advisor role. The search for a new CEO has commenced, and current CFO Pia Aaltonen-Forsell will lead the company temporarily.
Northvolt was seen as a promising player in the European EV battery industry. In 2021, it inaugurated its first battery factory in Sweden and boasted of producing battery cells with 100% recycled nickel, manganese, and cobalt. Partnerships with BMW and Volvo were established, along with plans for a Canadian battery factory.
Despite initial successes, Northvolt encountered challenges, including BMW withdrawing from a significant battery deal valued at around $2 billion in June. In September, Northvolt announced a strategic review and cost-cutting measures, including halting cathode active material production at its original factory, which never reached full production capacity.