Northvolt's Bankruptcy in Sweden Puts 5,000 Jobs at Risk, Leaves $8 Billion Debt; Volkswagen's 21% Stake Impacted

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Updated Mar 12, 2025, 11:26 AM

Northvolt, a Swedish manufacturer of battery cells for electric vehicles, has filed for bankruptcy in Sweden, marking one of the largest corporate failures in the country's history. The company, which had been Europe's leading hope to challenge major Asian EV battery producers, announced its inability to secure the necessary financial conditions to continue operations. Over 5,000 jobs are at risk due to the bankruptcy. The bankruptcy filing comes after Northvolt sought Chapter 11 protection in the U.S. in November of the previous year due to dwindling cash reserves. The company's debt exceeded $8 billion across its entities involved in the Chapter 11 process as of the end of January. Peter Carlsson, the former CEO, resigned shortly after the Chapter 11 filing. Major stakeholders in Northvolt include Volkswagen, holding a 21% stake, and Goldman Sachs with a 19% stake. The company had previously secured over $10 billion in equity, debt, and public financing since its inception in 2016. Despite these efforts, Northvolt faced challenges such as rising capital costs, supply chain disruptions, and difficulties in scaling production at its flagship plant in northern Sweden. The European automotive industry had high expectations for Northvolt, aiming to reduce dependence on Chinese battery manufacturers like CATL and BYD. The bankruptcy has led companies like Porsche, which had supply contracts with Northvolt, to seek alternative suppliers. BMW canceled a $2 billion order in June of the previous year due to Northvolt's failure to fulfill a long-term supply contract. Meanwhile, Scania's production of electric trucks remains unaffected by Northvolt's bankruptcy, and Volkswagen has stated it will maintain its strategy with multiple battery cell suppliers.

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Sources

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Biziday

@BizidayApp

https://t.co/5mMHEtwWVU The Swedish manufacturer of batteries for electric cars, Northvolt, has filed for bankruptcy. The company was considered the hope of Europe to rival Asian manufacturers.

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@ReutersJapan

Automotive battery Northvolt also files for bankruptcy in Sweden, hitting European automobile industry https://t.co/Qons9YxgHh https://t.co/Qons9YxgHh