Swedish EV battery maker Northvolt files for bankruptcy
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The news: One of Sweden’s largest battery cell makers for electric vehicles (EVs), Northvolt, has filed for bankruptcy, dashing hopes of Europe becoming a competitor in the Chinese-dominated sector.
The numbers: The bankruptcy filing is one of Sweden’s largest, with debt of over USD8 billion ($12.7 billion) as of end-January. The company had gained over USD15 billion in corporate and government investment since it was founded in 2016.
The context: In November last year, the company filed for Chapter 11 bankruptcy in the US, and had hoped that recent talks with dozens of potential investors would secure USD1 billion in financing to protect the future of its final existing battery factory in Skellefteå, near the Arctic Circle. However, Northvolt said on Wednesday that despite increased production at its factory and cost cutting measures, it has been unable to secure financing to continue and that a court-appointed trustee would begin selling its assets.
Tom Johnstone, interim chairman of the Northvolt board said “We are hopeful that the outreach we have undertaken with potential investors during the Chapter 11 process will accelerate identifying the necessary financing to allow continued trading under the Swedish bankruptcy process.”
In November the FT reported that the company had tried to open as many as six factories at the same time, with current and former employees telling the masthead that there were problems with poor management, safety standards, and an over-reliance on Chinese machinery at Northvolt.
Europe had hoped that Northvolt would allow the union to remain competitive in the EV battery business, where China remains the dominant player. Chinese battery maker CATL is the world’s largest operator, and is building plants in Germany, Hungary and Spain.
The company said that Northvolt Germany and Northvolt North America in Canada are not included as part of the bankruptcy.
What they said: Johnstone added: “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. For me personally, 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 sources: Northvolt statement, Financial Times
