Swedish battery manufacturer Northvolt, once seen as a potential leader in the European battery industry, has announced its decision to file for bankruptcy in Sweden.
In a press release, the company cited a combination of challenges including rising capital costs, geopolitical instability, supply chain disruptions, and shifting market demands as factors contributing to its financial difficulties. Additionally, internal production ramp-up challenges further impacted Northvolt’s operations.
Rendering of Northvolt Six battery factory in Quebec, Canada
Despite efforts to improve its financial situation, such as filing for Chapter 11 bankruptcy in the U.S. and implementing cost-cutting measures, Northvolt was unable to secure the necessary additional funding to sustain its operations.
Per Swedish law, a court-appointed trustee will oversee the sale of Northvolt’s business and assets to settle its outstanding financial obligations.
Volvo and Northvolt partner on battery development and production
Northvolt’s first battery factory opened in Sweden in 2021, boasting the production of cells made with 100% recycled materials. Partnerships with BMW and Volvo were established, and plans for additional factories were in motion, positioning Northvolt as a potential competitor to established battery companies serving European automakers.
However, challenges arose as the initial plant failed to reach full production capacity, leading to setbacks such as BMW canceling its supply deal with Northvolt. This was followed by layoffs and the resignation of CEO Peter Carlsson.