November 24 2024: Northvolt AB and some of its subsidiaries in the US announced on Thursday it had filed for Chapter 11 bankruptcy protection in the US.
Chapter 11 protection enables a firm to continue trading while it re-organizes itself. The voluntary restructuring should release access to $145 million in cash and $100 million debtor-in-possession financing (this allows them to continue operations).
The following day Peter Carlsson, who has been CEO of Northvolt since 2016 said he would step aside.
The company, employs about 6,600 staff across seven countries, said it expects to complete the restructuring by the first quarter of next year.
The pace of momentum had stepped up a notch when the Sweden’s minister for energy, business and industry and deputy PM, Ebba Busch announced on Tuesday it does not plan to take a stake in battery maker.
Busch categorically ruled out investing in the struggling battery manufacturer, reiterating the government’s position that there are no immediate plans to help, despite Northvolt’s strategic importance.
“There are huge investments happening in the green transition in Sweden whether or not the Northvolt project gets fully completed or not,” she said. But she went on to underscore Northvolt’s role “in the industrial fight with China and the US.”
Northvolt, founded in 2016 by former Tesla engineers, has been at the forefront of Sweden’s efforts to develop a competitive battery manufacturing sector. But the company has been blighted with difficulties in recent months as it fights to survive amid production problems, sluggish demand and competition from China.
In another shot across its bows, it was also announced this week that Sven Fuhrmann, head of investments at German auto maker Volkswagen, is leaving Northvolt’s board.
The German group is Northvolt’s biggest owner with a stake of 21%, according to its annual report. It’s also the largest offtaker — Volkswagen ordered $14 billion of battery cells in 2021 to be delivered across 10 years.
Northvolt, once seen as Europe’s best hope for a homegrown EV battery maker, has been seemingly fire-fighting in recent months as it continues to explore options to stay afloat. Industry insiders immediately saw the latest comments from the Swedish government declining to help, were a prelude to the end.
Busch said. “To go in and have state ownership in Northvolt, for example, is not on the table.”
Her comments echoed those of prime minister Ulf Kristersson who had said in September that the government did not have plans to invest in the cash-strapped battery maker, which was shrinking its operations and cutting jobs `to stay afloat.
