17/03/2025 07:38:52
Swedish battery manufacturer Northvolt filed for bankruptcy on 12 March 2025, bringing an abrupt end to a company once seen as Europe’s best hope of challenging Asian dominance in electric vehicle (EV) battery production.
Northvolt cited rising capital costs, geopolitical instability, supply chain disruptions, and shifting market demand as the main factors behind its financial collapse. The company had sought Chapter 11 bankruptcy protection in the United States in November 2024, hoping to restructure its finances and secure new investment. However, despite engaging with potential backers, it was unable to raise the $1 billion to $1.2 billion required to continue operations.
Following the bankruptcy filing, a Swedish court-appointed trustee will oversee the sale of Northvolt’s business and assets and manage the settlement of its debts. The company has named Mikael Kubu as the trustee.
Northvolt had received more than $10 billion in funding from investors including Volkswagen and Goldman Sachs since its founding in 2016. The company had positioned itself as a key player in Europe’s battery supply chain, promising to use renewable energy to manufacture sustainable EV batteries.
However, it struggled with production issues, including delays at its Skellefteå gigafactory, cost overruns, and an over-reliance on Chinese suppliers. The company had also attempted to develop multiple production sites simultaneously in Sweden, Germany, and North America, stretching its resources too thin.
The EU’s decision to impose tariffs on Chinese-made EVs, combined with U.S. tariffs on key battery materials, further disrupted Northvolt’s supply chain. BMW, one of Northvolt’s largest customers, cancelled a $2 billion order in mid-2024 due to missed delivery deadlines.
Northvolt employed over 5,000 workers, and its bankruptcy leaves many uncertain about their future. The company has stated that it is working with trade unions and government agencies to provide support during the transition.
The Skellefteå plant, once seen as a cornerstone of Sweden’s green industrial ambitions, faces an uncertain future. Several investors, including Volkswagen and Scania, have signalled potential interest in acquiring parts of the business, but no immediate rescue plan has been announced.
Northvolt’s collapse is a significant setback for Europe’s battery manufacturing ambitions. The European Union had hoped to build a self-sufficient EV battery supply chain to reduce dependence on Chinese companies like CATL and BYD. With Northvolt’s failure, European automakers may be forced to increase reliance on Asian suppliers for critical battery components.
Interim chairman Tom Johnstone acknowledged the impact of the bankruptcy, stating:
“We set out to build something groundbreaking—to drive real change in the battery, EV, and wider European industry. This is an incredibly difficult day for everyone at Northvolt.”
While Northvolt’s assets may be sold off in parts, the company’s failure highlights the financial and logistical challenges of scaling battery production in Europe. Industry analysts warn that without stronger government support, Europe risks falling further behind in the global EV battery race.
As the bankruptcy process unfolds, the court-appointed trustee will determine the fate of Northvolt’s production facilities and technology. Northvolt Germany and Northvolt North America have not filed for bankruptcy but remain under the control of the trustee.
For now, the Skellefteå plant remains inactive, and potential buyers have yet to emerge.