STOCKHOLM: Northvolt, the Swedish maker of battery cells for electric vehicles, said on Wednesday it has filed for bankruptcy in Sweden, bringing to an end Europe's best hope of developing a rival to major Asian EV battery players.
Northvolt sought U.S. Chapter 11 bankruptcy protection last November as its cash pile dwindled, trying to secure funds that would allow it to fix persistent problems in scaling up output at its flagship plant in northern Sweden.
“The company was unable to secure the necessary financial conditions to continue in its current form,“ the group, which has over 5,000 employees, said in a statement.
Swedish daily Dagens Nyheter had reported on Tuesday that Northvolt was on the brink of filing for bankruptcy and that the board could decide the issue on Wednesday.
At the end of January this year its debt stood at more than $8 billion across the nine Northvolt entities in the Chapter 11 process, previously released documents showed.
“A Swedish court-appointed trustee will now oversee the process, including the sale of the business and its assets and settlement of outstanding obligations,“ the company said in the statement.
Europe had been hoping that Northvolt would reduce Western carmakers' reliance on Chinese rivals such as battery maker CATL and EV and battery maker BYD.
The company, whose motto was “make oil history”, received more than $10 billion in equity, debt and public financing since its 2016 inception, counting Volkswagen, with a 21% stake, and Goldman Sachs, holding 19%, as its biggest owners.
Northvolt early last year clinched a $5 billion green loan deal with a group of lenders, intended to pay for a large plant expansion, but the funding was later cancelled as the company's problems mounted.
German carmaker BMW cancelled a $2 billion order in June of last year as the battery maker failed to deliver on a long-term supply contract for battery cells signed in 2020.
Former Northvolt CEO Peter Carlsson, who stepped down shortly after the Chapter 11 filing in November, said at the time of his departure that the company needed up to $1.2 billion to restore its business.
