Northvolt, once seen as Europe’s strongest contender in the battery industry, has filed for bankruptcy in Sweden after failing to secure the necessary financing to continue operations. A court-appointed trustee will oversee the sale of its assets.
Backed by Volkswagen, Goldman Sachs, and BlackRock, Northvolt had attracted $15 billion in corporate and government investment to develop electric vehicle (EV) battery technology. However, efforts to raise $1 billion to support its Skellefteå factory were unsuccessful.
The company previously filed for Chapter 11 bankruptcy in the US in November and faced challenges due to overexpansion, management issues, and heavy reliance on Chinese machinery.
Northvolt’s assets include its Skellefteå factory, an R&D facility in Sweden, and land and permits for factories in Germany and Sweden. Potential buyers could include Scania, its main customer, and Volkswagen, its largest shareholder.
Scania, which provided fresh capital to Northvolt in November, has since secured an alternative battery supplier but noted that battery shortages have impacted its electric truck production. Meanwhile, Volkswagen has written off €661 million in Northvolt-related equity and loans.
Northvolt’s collapse highlights China’s stronghold on the European EV battery market. CATL, the world’s largest battery manufacturer, is expanding in Germany, Hungary, and Spain, while Volkswagen has partnered with another Chinese firm, Gotion.
Although other European EV battery start-ups exist, most are in early stages. Northvolt’s bankruptcy follows Norwegian group Freyr’s decision to abandon battery production in favour of solar power.
With Northvolt’s downfall, Europe faces continued challenges in establishing a competitive domestic EV battery industry.
