Swedish electric battery giant Northvolt announces filing for bankruptcy. A surprise, the company was to be one of the spearheads of the European response to Chinese competition on the issue. Its CEO has just resigned.
Electric battery company Northvolt in perilous financial situation
For several months, Northvolt has been struggling to achieve its production targets. Mbut above all, to maintain its financial balance. According to internal documents, the company has not met its weekly production targets since September 2024. These delays worsen an already complicated situation, marked by the failure of a $300 million rescue plan.
Faced with financial problems, the group announces that it has requested protection under American bankruptcy law. This procedure aims to reorganize the company's debt, adjust its activity according to the expectations of its customers and preserve its operations. In short: Northvolt files for bankruptcy.
To support its activities in the short term, Northvolt has financing of $145 million, guaranteed by its assets, as well as a contribution of $100 million from its customers. These measures will allow the company to continue its activity while awaiting a complete restructuring, planned by the end of the first quarter of 2025. At least, buyers are welcome before a possible liquidation.
A failed strategy
Northvolt's difficulties led to drastic decisions. At the end of September 2024, the group announced the elimination of 1,600 positions, or nearly 25% of its workforce. At the same time, development at its main production site in Skellefteå in northern Sweden was suspended.
Northvolt's strategy has also refocused on the manufacturing of electric battery cells, abandoning other stages of the production chain such as recycling or the manufacturing of cathodes. This restructuring made it possible to reduce costs in the short term, but it weakened the overall model of the company.
In this context of crisis, Northvolt announces the resignation of its CEO and co-founder, Peter Carlsson. A former Tesla executive, he helped make Northvolt a major player in the field of batteries for electric vehicles. Peter Carlsson leaves management to a duo of interim managers, who will have the difficult task of stabilizing the company while awaiting the appointment of a new board.
