In a big blow to the volatile and cutthroat electric vehicle industry, Swedish EV battery manufacturer Northvolt will be split up and sold after filing for bankruptcy in its native Sweden.
According to a statement, the company’s filing comes after “an exhaustive effort to explore all available means to secure a viable financial and operational future” as it failed to weather certain conditions affecting its business.
“Like many companies in the battery sector, Northvolt has experienced a series of compounding challenges in recent months that eroded its financial position,” it said.
It added that it “faced significant internal challenges in its ramp-up of production, both in ways that were expected by engagement in what is a highly complex industry, and others which were unforeseen.”
Not Northvolt’s first rodeo with bankruptcy
Northvolt had been entrenched in financial difficulty prior to its Swedish bankruptcy filing, as it suffered under its debt, slow EV demand, and production delays brought on by supply chain issues.
In November last year, the battery maker filed for Chapter 11 bankruptcy protection in the United States to raise more money. In filings in U.S. courts, the battery maker said it owed close to $5.8 billion.
However, finding more money to fund the operation was too difficult. In a statement, Northvolt said that a court-appointed Swedish trustee would take over and “determine the future of Northvolt’s businesses and their assets, including technology and production facilities.”
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The company’s subsidiaries, Northvolt Germany and Northvolt North America are not part of the bankruptcy proceedings in Sweden. According to a statement, the filings only affect Northvolt AB, Northvolt Ett AB, Northvolt Labs AB, Northvolt Revolt AB, and Northvolt Systems AB.
The company was launched in 2016 as SGF Energy in Stockholm, Sweden, and originally planned to build a European battery gigafactory.
Most European automakers source their batteries from suppliers in Asia, including Samsung and LG Energy Solution in South Korea and China’s leading producer, CATL. Originally, Northvolt aimed to capture 25% of the European battery market by 2030.
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In a statement, Tom Johnstone, the Interim Chairman of Northvolt’s Board of Directors, said that it is an “incredibly difficult day for everyone at Northvolt,” adding that it made many improvements in recent months to achieve its goal of creating more sustainable EV batteries for its customers.
“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,” he said.
“For me personally, it remains key for Europe to have a homegrown battery industry, but it is a marathon to build such an industry.”
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