Swedish battery cell maker Northvolt, which produces battery cells for electric vehicles (EVs), has filed for Chapter 11 bankruptcy in the US. Peter Carlsson, the company’s CEO and co-founder, will step aside to take on a role as senior advisor. However, he will remain a member of Northvolt’s board.
Europe has been hoping that Northvolt would reduce Western car makers’ reliance on Chinese rivals such as battery maker CATL and EV and battery maker BYD. This comes as a blow to these hopes that it’s the most developed battery player.
What’s next for Northvolt?
As per Northvolt, the company has only enough cash to support operations for about a week and has secured $100 million in new financing for the bankruptcy process. This is part of $245 million in financing support for the bankruptcy and support for the manufacturing of electric vehicle battery cells in Skellefteå, northern Sweden. The company will continue its operations as continue as usual during the bankruptcy.
Northvolt, which employs around 6,600 staff across seven countries, said it expects to complete the restructuring by the first quarter of 2025. As part of the restructuring, it will evaluate proposals for new money investment from strategic and financial investors, as well as existing lenders, shareholders, and customers.
“This decisive step will allow Northvolt to continue its mission to establish a homegrown, European industrial base for battery production,” Tom Johnstone, interim chairman of Northvolt’s board, said in a statement. “Despite near-term challenges, this action to strengthen our capital structure will allow us to capture the continued market demand for vehicle electrification.”
That said, here are some key facts about Northvolt and its journey so far.
Circular battery production
Northvolt’s Revolt Ett is a pioneering recycling facility integrated with its Northvolt gigafactory in Sweden. It recovers critical battery metals like lithium, nickel, and cobalt with a carbon footprint 70% lower than traditional mining. This innovation supports a fully circular battery production process, advancing sustainability in energy storage. The facility supports the European energy transition with major partners like BMW, Volkswagen, and Volvo.
Focus on next-generation batteries
Founded in 2016 in Stockholm by Peter Carlsson and Paolo Cerruti, Northvolt is driving innovation in next-generation batteries, with a strong focus on lithium-metal technology for high-performance applications like aviation and electric vehicles. After acquiring Cuberg, a California-based startup, it shifted R&D operations to its Northvolt Labs campus in Sweden. This move consolidates expertise and enhances development efficiency for batteries offering superior energy density, positioning Northvolt at the forefront of advanced energy storage solutions.
Green finance leadership
Northvolt secured one of the largest green financing deals by securing a $5 billion loan. With this, the total debt and equity investment raised by the company accounts for $13 billion. It is rapidly becoming a key player in the global green energy supply chain, supported by the European Investment Bank and other international investors.
Unique approach to sustainability
It intends to enable 50% of its raw material requirements to be sourced from recycled batteries by 2030. Last year, the company developed a new battery based on sodium-ion technology, which uses less critical minerals. The sodium-ion batteries are said to be cheaper and safer than their lithium-ion counterparts, which are prone to a fire risk in gadgets and EVs.
Strategic industry partnerships
Northvolt’s extensive customer list includes automotive giants such as Scania, BMW, and Volkswagen. These collaborations not only ensure stable revenue but also position the company at the forefront of the electrification of transport and energy sectors globally.