Northvolt, Europe's Largest Car Battery Manufacturer, Declares Bankruptcy in Sweden

Northvolt AB, the largest European manufacturer of electric car batteries, has declared technical bankruptcy in the Stockholm District Court, having failed to secure the necessary funding to ensure its future.

"Despite exhausting all available options to negotiate and implement a financial restructuring, including a Chapter 11 process in the U.S., and despite liquidity support from our lenders and key counterparts, the company cannot secure the financial conditions necessary to continue in its current form," the company confirmed in a press release.

Northvolt was Europe's greatest hope to compete with Chinese companies that manufacture the majority of electric batteries.

"We are confident that the contact we have maintained with potential investors during the process will accelerate the search for the necessary funding to continue operating within the framework of the Swedish bankruptcy process," stated Northvolt's interim president, Tom Johnstone.

At the end of December, the company filed for voluntary bankruptcy in the United States to restructure its debt, reduce its business, and secure a "sustainable base" to continue its operations.

In September 2024, the Swedish company decided to cut one-fifth of its workforce, 1,600 jobs in Sweden, due to liquidity problems.

Although Skelleftea has been the locality most affected by the workforce cuts—a thousand jobs—the group reported that over the coming months, it would cut an additional 400 jobs in Västeras, where programs and expansion will slow down at Northvolt Labs.

The company then admitted needing a workforce reduction of approximately 20% globally and 25% in Sweden to remain "sustainable," along with suspending the construction of new sites in Germany, Canada, and Sweden after tripling its losses to exceed $1 billion (about €936 million) in the last year.

Finally, Northvolt had to pay approximately 200 million Swedish crowns (€18.2 million) in taxes to the Swedish Tax Agency. According to Swedish public television SVT, unable to make the payment, the entity had to declare bankruptcy.

From now on, an external administrator will handle the sale of the company and its assets, although Northvolt Germany and Northvolt North America have not declared bankruptcy yet.