Northvolt CEO Resigns Following Bankruptcy Filing in the U.S.

Northvolt CEO, Peter Carlsson, announced his resignation on Friday after the largest European manufacturer of electric vehicle batteries filed for bankruptcy in the United States, according to a company statement.

The company, once one of Europe's most valuable private tech firms, has voluntarily filed for bankruptcy to restructure its debt, reduce its business, and ensure a "sustainable base" for continued operations. The restructuring process is expected to conclude in the first quarter of 2025. For now, Northvolt has confirmed that it will keep its Ett factory in Sweden operational.

"This decisive step will allow Northvolt to continue its mission of establishing a local European industrial base for battery production," stated the interim chairman of the company's board, Tom Johnstone.

Additionally, he added that despite the "challenges" Northvolt faces in the short term, this action will enable the company to "strengthen its capital structure to capture the ongoing demand in the electric vehicle market."

The Scandinavian company's goal is to access a financing line of approximately 234 million euros, of which about 138 million will be in cash and another 95 million through debtor-in-possession financing, a method that allows bankrupt companies under Chapter 11 of the U.S. bankruptcy law to continue operating.

Northvolt's industrial base relies on the production of lithium-ion batteries for electric cars, which has recently been affected by the arrival of Chinese competition in Europe.

Consequently, in September, the Swedish company decided to cut its workforce by one-fifth, 1,600 jobs in Sweden, due to liquidity issues. Although Skelleftea has been the 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 admitted then that it needed a workforce reduction of approximately 20% globally and 25% in Sweden to remain "sustainable."

Additionally, in July, Northvolt announced a strategic review of its business plan, warning of the suspension of new factory constructions in Germany, Canada, and Sweden after tripling its losses to over $1 billion (about 936 million euros) in the past year.

The company is facing several issues related to daily business operations, primarily due to the loss of major clients like BMW or Scania from Volkswagen, who have frequently complained about delays in product delivery and battery quality issues. Until a few months ago, Northvolt's financing was backed by an order volume valued at over 49.3 billion euros.