One of Europe’s top hopes in battery manufacturing, Northvolt, has filed for Chapter 11 bankruptcy protection in the U.S. Following this, the company’s CEO Peter Carlsson stepped down but will continue as a consultant.
Amidst financial struggles, Northvolt disclosed it has only $30 million in cash against a debt of $5.84 billion. The company estimates needing between $1 and $1.2 billion to complete restructuring by the first quarter of 2025. In a bid to recover, Northvolt has secured $100 million in credit from its main customer and investor, the Swedish truck maker Scania.
To pay its 6,600 employees' wages, Northvolt received approval from a U.S. bankruptcy court to draw on an additional $51 million loan from Scania. Prior to its filing, the company had already reduced its workforce by about 25%. Additionally, the bankruptcy filing revealed Volkswagen’s convertible debt agreement of $330 million, due in December 2025. Volkswagen holds a 21% stake in Northvolt, making it the company’s largest shareholder.
The filing follows Northvolt's shock over BMW's cancellation of a €2 billion battery order in June. Facing challenges in expanding its battery production in Europe and the U.S., Northvolt is aiming to overcome these hardships through bankruptcy protection.
