Northvolt, the once-promising Swedish electric vehicle battery start-up, has filed for bankruptcy in Sweden, signaling a dramatic setback in Europe’s attempt to challenge the dominant Asian battery industry. In a statement, the company said it was unable to secure the financial conditions needed to continue in its current form, citing a series of compounding challenges including rising capital costs, geopolitical instability, supply chain disruptions, and shifts in market demand.
The bankruptcy filing comes after a prolonged period of financial strain. Northvolt had already filed for chapter 11 bankruptcy protection in the US last November, and its CEO, Peter Carlsson, departed amid efforts to raise between $1bn and $1.2bn to stabilize the business. Despite receiving over $10bn in equity, debt, and public financing since its founding in 2016 from major investors like Volkswagen and Goldman Sachs, the company was unable to maintain momentum.
Northvolt’s ambitions to build Europe’s first homegrown battery gigafactory in northern Sweden stalled last year, as the startup struggled with the complexities of scaling production across multiple sites in Sweden, Germany, and the US. In its efforts to cut costs, the company had already announced 1,600 job cuts and a comprehensive restructuring plan that it hoped to complete by the end of March.
Interim Chair Tom Johnstone described the bankruptcy as “an incredibly difficult day for everyone at Northvolt,” emphasizing that the company set out to drive transformative change in the EV and battery sectors. With 5,000 employees now facing an uncertain future, a court-appointed trustee will oversee the sale of Northvolt’s assets and the settlement of its outstanding debts.
