Swedish manufacturer of batteries for electric cars Northvolt files for bankruptcy. The company saw demand from customers for its batteries fall sharply, and as a result cannot keep its head above water financially.
Northvolt is a Swedish company founded in 2016 by Peter Carlsson. Carlsson previously worked as a manager at EV builder Tesla. Northvolt focuses on the development and production of lithium-ion batteries. These battery cells, incidentally, are not exclusively intended for electric vehicles (EVs), but also for industrial applications and power grids.
Various production sites
Its first production site is Northvolt Ett in Skellefteå, Sweden, which has been operational since 2022. The company is also developing battery plants in Heide, Germany, and Quebec, Canada. In Gdańsk, Poland, Northvolt produces complete battery solutions for industrial applications and energy storage. Its headquarters are in Volthouse, Sweden.
The company started building a new battery plant in the German state of Schleswig-Holstein as recently as April last year. This plant, which was due to be operational in 2026, is to produce battery cells on European soil. It is aiming for a production capacity of 60 GWh per year. The company's total production capacity should thus reach over 170 GWh annually.
Sustainability
Sustainability plays an important role in Northvolt's production process. It says it wants to produce the greenest batteries for EVs, industry and the energy sector by using wind energy, among other things. The choice of the municipality of Heide in Schleswig-Holstein was also partly based on this. For instance, the region produces a lot of wind energy both onshore and offshore. A lot of renewable energy is also available through connections with both Denmark and Norway.
"It matters how we produce a battery cell. If you use coal in your production, this means you incorporate a reasonable amount of CO2 in your battery. However, if we use renewable energy, we can build a very sustainable product. Our philosophy is that new energy-intensive industries like battery production should be located in close proximity to clean energy production," Carlsson explained at a Northvolt Drei announcement.
Declining demand
However, the Swedish battery manufacturer has been in financial trouble for some time. The company saw a decline in demand for batteries from EV manufacturers. Last year, for example, BMW cancelled a €2bn order from Northvolt. Scania additionally postponed battery deliveries.
The decline in interest from customers is partly due to disappointing demand for EVs on the one hand and fierce competition from Chinese EV makers on the other.
Chapter 11 filing
Northvolt filed for bankruptcy in 2024 already in the US. It filed a so-called Chapter 11 bankruptcy petition in the US state of Texas. This is a legal procedure in the United States in which a company seeks protection from its creditors to restore its financial position.
Chapter 11 is often used by larger companies facing financial difficulties, with the aim of continuing their operations through restructuring and reorganisation. With the Chapter 11 filing, Northvolt wanted to create room for raising financial resources to strengthen its financial position.
Northvolt also cut some 1,600 jobs in an attempt to keep its head above water. Construction of a new plant in Sweden was also halted. However, the measures proved insufficient; Northvolt is now forced to file for bankruptcy. This filing affects only the Swedish arm of the company. Northvolt also has a US and German branch, which are directly affected. An administrator will look into a possible sale of the Swedish branch.
Author: Wouter Hoeffnagel
Image: Northvolt
