Swedish electric vehicle (EV) battery maker Northvolt has collapsed, with at least $1 billion needed to save the company.
Northvolt filed for Chapter 11 bankruptcy protection in the US late last week, and co-founder Peter Carlsson has stepped down as CEO. The company’s other co-founder was former Tesla CEO Paolo Cerrui.
The Financial Times reported that Northvolt had $5.8 billion in debt when it filed for bankruptcy and only enough cash to cover a week’s worth of operations.
Northvolt investors, including Goldman Sachs and Danish pension fund ATP, have expressed hope that a rescue deal is still possible. Carlsson said at least $1 billion would be needed to save the company, with no existing investor willing to pay the full amount.
Founded in 2016, Northvolt’s collapse was blamed on excessive capital investment in expanding battery production capacity without securing battery offtake agreements. Bloomberg noted that BMW canceled orders worth $2 billion in June.
Battery production began at Northvolt’s first factory in Skelleftea, Sweden, in 2021. Another plant in Sweden was planned to open, as well as other plants in Germany and Canada, and an energy storage project in Poland.
“I should have pulled the brakes earlier on our expansion path to make sure the engine core was moving according to plan,” Carlsson told reporters.
“In hindsight, we were too ambitious with the timeframe to achieve this.”
Swedish Deputy Prime Minister Ebba Busch wrote on Platform X: “The process that has now begun is an important step towards a long-term solution. I hope it goes well. This is important for Sweden – important for Europe. But also for North America.
“Batteries are a strategically important technology, and in a geopolitically unstable world, we need Western production. China dominates production and processing, with the EU alone accounting for 1% of global battery raw material production.
“The EU’s dependence on Russian gas following Russia’s invasion of Ukraine will be seen as unexpected compared to our dependence on China for minerals and metals.”
“Northvolt is an important key in the Green Deal. It has many advantages of high quality and production away from geopolitical tensions.”
Busch is Sweden’s Minister for Energy, Trade and Industry.
The news comes less than two years after the collapse of Britain’s Britishvolt, which threatened plans for a Gigafactory in Northumberland, England.
Australian battery startup Recharge Industries bought Britishvolt, originally intending to use its plant to make larger batteries for energy storage devices. It then sold the project to Blackstone, which will develop data centers for the artificial intelligence (AI) industry.
Story in brief: CEO raised $10 billion from investors, other times very arrogant automakers lined up in panic, and then the CEO waved the white flag.
Source: Financial Times, Edie, Northvolt
