Northvolt AB files for bankruptcy in Sweden

In addition to Northvolt AB, the subsidiaries Northvolt Ett AB, Northvolt Labs AB, Northvolt Revolt AB and Northvolt Systems AB also filed for bankruptcy in Sweden, the company announced. These are the operating company of the Swedish cell factory Northvolt Ett, the research centre, the recycling subsidiary and the company for the production of battery modules and packs.

“Despite pursuing all available options to negotiate and implement a financial restructuring, including a Chapter 11 restructuring process in the United States, and despite liquidity support from our lenders and key counterparties, the company was unable to secure the necessary financial conditions to continue in its current form,” the company writes in its statement. “The Board therefore determined that this is the only available solution while the company pursues all realistic options to obtain financing to continue operating during the Swedish bankruptcy process.”

Trustee takes responsibility

In other words, it’s not over yet, the company will not be liquidated. However, the bankruptcy filing also shows that the financial situation remains very serious and continued operations are far from certain. “It should be underscored that in engaging in this process, the company found significant traction with potential partners and interest from investors — something which illustrates the strong underlying value and future potential of Northvolt and is testament to its accomplishments,” says Northvolt. “Ultimately, however, with limited time and financial resources available, the company was unable to conclude the necessary agreements to secure its future.” The statement also cites factors such as rising capital costs, geopolitical instability, resulting supply chain disruptions and changes in market demand, which would have affected not only Northvolt but also other companies in the battery industry.

What happens next? Now that the application has been submitted, a trustee appointed by the Swedish court will oversee the process, including the sale of the company and its assets and the settlement of outstanding liabilities. The process will be conducted under Swedish insolvency law, with a focus on ensuring an orderly transition for employees, partners and creditors. Northvolt has appointed Mikael Kubu as trustee.

German subsidiary not affected for now

Since Northvolt Germany, the company responsible for building the Northvolt Drei battery factory in Heide, Schleswig-Holstein, and Northvolt North America (responsible for building the Northvolt Six factory in Canada), are wholly-owned subsidiaries of Northvolt AB, “any decisions regarding these entities will be made by the court-appointed trustee of Northvolt AB in consultation with the Group’s lenders at the appropriate time,” the battery maker announced.

The German subsidiary has also already reacted. “Northvolt Germany was informed today that the parent company Northvolt AB in Stockholm has filed for insolvency under Swedish law. This was preceded by intensive negotiations with interested investors, which could no longer be concluded in time due to the tight financial situation,” a spokesperson said. “Northvolt Drei Project GmbH, as an independent GmbH, is not part of the insolvency filing and is in contact with the administrator now appointed for Northvolt AB in Sweden. Operations in Germany will continue. Northvolt Germany has informed the federal and state governments about all decisions and is in close contact with all stakeholders.”

Northvolt ran into increasing financial difficulties last year. On the one hand, the company faced “significant internal challenges in its ramp-up of production [at the Northvolt Ett factory], both in ways that were expected by engagement in what is a highly complex industry, and others which were unforeseen,” the company now says. Almost two years after the start of production, the factory has still not produced the expected quantities, leading to a shortfall in planned sales and the cancellation of a billion-euro order by shareholder BMW over the summer. The situation became increasingly explosive as further financing proved more difficult due to the global situation and investors (partly due to their own problems) were no longer willing to inject more money. Northvolt had subsequently abandoned its aggressive expansion strategy and sold off some of its subsidiaries. Just a few weeks ago, Northvolt sold its module production to its customer Scania. In November 2024, the company then filed for bankruptcy protection under US insolvency law and CEO Peter Carlsson resigned, but this did not bring the hoped-for breakthrough either.

Northvolt emphasises “several achievements” in its realignment (such as higher production volumes, a 55 per cent reduction in operating cash flow and the sale of the subsidiaries mentioned). However, the company was unable to attract a sufficient number of investors in the short time available.

“This is an incredibly difficult day for everyone at Northvolt. 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,” said Tim Johnstone, Interim Chairman of the Board. “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% improvement in production yield since September.”

northvolt.com (bankruptcy), info by email (reaction of Northvolt Germany)