Northvolt, the Swedish lithium-ion battery manufacturer specializing in electric vehicle batteries, has filed for Chapter 11 bankruptcy protection in the United States (like SAS did before). This legal mechanism, similar to Italy’s extraordinary administration, will allow the company to remain operational while restructuring its debts under court supervision.
A European EV powerhouse
Founded in 2015 by two former Tesla executives, Northvolt quickly became a key player in the global EV battery market. With its primary production facilities in Sweden and research and development centers in California, the company was seen as Europe’s leading contender against the dominance of Chinese and American battery manufacturers.
Industry experts had hailed Northvolt as a critical player in Europe’s push to build a competitive battery supply chain for the EV revolution. However, recent financial struggles have placed this ambition in jeopardy.
In its Chapter 11 filing, Northvolt disclosed a precarious financial situation. The company has only $30 million in liquidity (approximately €28 million), enough to sustain operations for about a week. Meanwhile, its total debts amount to a staggering $5.8 billion (€5.5 billion). Northvolt’s financial woes come as a shock to the EV industry, particularly in Europe, where the company was viewed as a cornerstone of efforts to reduce reliance on non-European suppliers. Its situation highlights the immense financial and operational challenges of scaling up battery production in a market dominated by established giants.
Next steps
Chapter 11 bankruptcy protection will provide Northvolt with the opportunity to develop a debt repayment and recovery plan while continuing its operations. Whether the company can emerge from this crisis and retain its position as a leader in the EV battery sector remains uncertain.
Northvolt’s situation serves as a stark reminder of the volatility in the high-stakes EV market, where even the most promising players are not immune to financial turbulence.
