Swedish battery manufacturer Northvolt has filed for bankruptcy in Sweden, marking the end of a saga for this company that promised much but ultimately delivered very little. Northvolt was considered Europe’s best hope to compete with China, which dominates the industry, in battery manufacturing.
The Swedish start-up, backed by Volkswagen, Goldman Sachs, and BlackRock, announced that it failed to secure financing to continue operations and that the bankruptcy trustee appointed by the court will now liquidate its assets.
– This is an incredibly difficult day for everyone at Northvolt. We aimed to build something revolutionary – to drive real change in the battery, electric, and broader European industry and accelerate the transition to a green and sustainable future – said Tom Johnstone, interim chairman of Northvolt.
The bankruptcy marks the end of a company that received around $15 billion from investors and governments for technology critical to electric vehicles, as Europe attempts to catch up with Asian countries such as China, Japan, and South Korea.
Second Time
The bankruptcy filing in Sweden comes after Northvolt had already filed for Chapter 11 bankruptcy in the U.S. at the end of last year, specifically in November, but continued to seek ways to sustain operations with investors. For instance, the Swedish truck manufacturer Scania, a shareholder and the largest customer of Northvolt’s batteries, announced at that time that it would lend them $100 million to ensure the production of battery cells for electric vehicles at the facility in Skellefteå, Sweden. However, this did not help either, and in November of last year, CEO Lars Eriksson resigned, stating that the company needed to secure between $1 billion and $1.2 billion to normalize operations. Ultimately, the funds were not secured, and bankruptcy remained the only solution.
It should also be noted that this is not the first time a battery manufacturing start-up has failed. The failure of A123 Systems over a decade ago stands out as the most notable example in the U.S. – and it likely will not be the last. Manufacturing lithium-ion cells is challenging, requiring deep knowledge of chemistry, manufacturing equipment, and quality improvement. Northvolt’s bankruptcy is likely more a sign of poor leadership than a lower demand for electric vehicles than expected.
