Stockholm, Sweden, 12 March 2025 – Following months of financial instability and mounting industry challenges, Northvolt AB has officially filed for bankruptcy, signaling the potential end of what was once seen as Europe’s flagship manufacturer for lithium-ion batteries.
The company, based out of Sweden, announced its bankruptcy filing today, encompassing its subsidiaries: Northvolt Ett AB, Northvolt Labs AB, Northvolt Revolt AB, and Northvolt Systems AB. Noteworthy, Northvolt Germany and Northvolt North America, both wholly-owned subsidiaries, will not be affected as they have not filed for bankruptcy.
Shifting market demand and geopolitical instability contributed to Northvolt's decline, alongside rising costs and significant internal challenges. The Swedish battery manufacturer has experienced difficulty ramping up production at its Northvolt Ett factory, leading to substantial operational cash flow reductions, layoffs, and failure to meet sale expectations, even losing significant contracts like the billion-euro order from carmaker BMW last summer.
Prior to this bankruptcy, Northvolt's situation had become dire. After unsuccessfully attempting to secure funding under Chapter 11 bankruptcy protection within the U.S. environment and garnering liquidity support from lenders, Northvolt found itself unable to craft the necessary financial framework for its operations. "Despite pursuing all available options to negotiate and implement a financial restructuring, including the Chapter 11 process, the company was unable to secure the necessary financial conditions to continue in its current form," Northvolt stated, reflecting upon its current predicament.
Tom Johnstone, Interim Chairman of Northvolt's Board of Directors, lamented, "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." He went on to express hopes for securing financing through the current bankruptcy process.
A midst this, Northvolt had managed to reduce operational cash outflows by 55% and reported progress with its production capabilities, claiming cell output had doubled and production yield had improved by 50% since September 2024. The interim chair emphasized this upward trend, "We ramped up production to meet customers’ needs, delivered our first one million battery cells to a European customer, and completed several divestitures, signaling progress even through turbulent times. These products are not only advanced; they are achieved using 100% fossil-free energy, making them leaders in sustainable battery technology worldwide.”
Despite its efforts, Northvolt's leadership found itself unable to finalize agreements with potential investors which had expressed interest during this trying period. Johnstone remarked positively on the engagement from potential partners and investors: “It should be underscored...that the company found significant traction...which illustrated the strong underlying value and future potential of Northvolt.”
Now, as the court has appointed Mikael Kubu as the trustee to oversee the bankruptcy proceedings, there are concerns about the fate of approximately 5,000 employees as well as the future of the company’s technology and production facilities. A plan is expected to focus on orchestrated asset sales and debt settlements under Swedish insolvency law, ensuring orderly transitions for employees, suppliers, and creditors.
Many stakeholders have already been informed and are engaging with the trustee's office for guidance during this process. Northvolt emphasizes its commitment to upholding transparency and support during this tumultuous time.
With operational concerns, mounting debts — totaling around 60 billion kronor (approximately 5.2 billion euros) — and its expansive ambitions curtailed, Northvolt undergoes this painful restructuring, reflections of the rapid changes and stresses affecting the global battery manufacturing industry.
The ultimate goal remains on the table: rebuilding European battery independence and leading the charge toward sustainable manufacturing practices. Despite today’s harsh realities, the foundational work done over the years, as highlighted by leadership, augurs potential for a future reformulation of the company's vision.
For stakeholders, including employees, customers, and partners, Northvolt aims to communicate effectively throughout the process. The company recognizes the significant emotional and financial impact surrounding its decisions, and is committed to keeping those affected informed and supported.
The bankruptcy filing has starkly highlighted the challenges prevailing not only over Northvolt’s specific operational model but also within the larger battery sector, where many companies are grappling with the interplay of rising operational costs, unstable market demands, and the relentless drive for sustainable production solutions.