Swedish battery manufacturer Northvolt has succumbed to financial woes, prompting a bankruptcy filing after it could not obtain the necessary funding.
The firm faced an uphill battle in recent times, hampered by difficulties in meeting production goals despite receiving liquidity injections from major lenders such as Goldman Sachs and Blackrock, as reported by City AM.
The company had previously turned to US Chapter 11 bankruptcy protection back in November.
An emotional announcement came from Tom Johnstone, interim chairman of Northvolt's Board of Directors: "This is an incredibly difficult day for everyone at Northvolt," he commented, reflecting on the ambition behind the company's founding. "We set out to build something groundbreaking - to drive real change in the battery, EV and wider European industry and accelerate the transition to a green and sustainable future."
Johnstone also lamented the unfortunate timing of the bankruptcy, highlighting that it follows a period of enhanced investor engagement and notable advances at the firm's Skellefteå operation. "The outcome is especially hard considering not only the level of engagement and interest we held with potential partners and investors in recent months, but also the clear improvement and upwards trajectory that we have been seeing in Northvolt's production in Skellefteå, where cell output from serial production lines has doubled and we have secured a 50 per cent improvement in production yield since September."
The collapse of Northvolt is a significant setback for the European battery industry, which is currently striving to find its footing in a market dominated by Chinese companies.
"Like many companies in the battery sector, Northvolt has experienced a series of compounding challenges in recent months that eroded its financial position, including rising capital costs, geopolitical instability, subsequent supply chain disruptions, and shifts in market demand," the company announced in a statement.
A trustee appointed by a Swedish court will supervise the bankruptcy process, which includes the sale of the business and its assets.