Northvolt Files Chapter 11, CEO Resigns Amid Crisis

Northvolt has filed for US Chapter 11 bankruptcy protection, citing financial difficulties and operational setbacks. The company now faces significant restructuring to regain stability.

“This is an emotional day. Northvolt has been like a baby to me,” said Peter Carlsson, Co-founder and CEO, Northvolt, who resigned a day after the filing. Carlsson will remain as a senior adviser and board member while the company seeks new leadership. Interim management will include CFO Pia Aaltonen-Forsell and Matthias Arleth, President of Battery Cells, who will serve as COO.

Since its founding in 2016, Northvolt has raised over US$15 billion, including investments from Volkswagen and Goldman Sachs, which hold significant stakes. However, the company had only US$30 million in cash at the time of its bankruptcy filing—enough to sustain operations for just one week. Northvolt’s debts amount to US$5.8 billion, with major liabilities including US$313 million to the European Investment Bank (EIB) and US$154 million in shareholder loans.

To facilitate restructuring, Northvolt secured US$100 million in new financing from Scania, a key customer, and aims to raise US$1-1.2 billion. 

Northvolt's operational difficulties have been attributed to machine faults, inexperienced staff, and overly ambitious production targets. According to internal documents reviewed by Reuters, the company consistently missed its production goals. For example, during one week in October, Northvolt delivered only 22,000 battery cells against a target of 30,000. In late October, the company also halted operations in one of its manufacturing buildings, with the stoppage expected to last until December.

Northvolt was seen as a symbol of Europe’s efforts to reduce its reliance on Asian suppliers and establish a competitive electric vehicle (EV) battery industry. “Northvolt’s bankruptcy reflects the challenges faced by European clean tech companies,” said Christian Ehler, Member of the European Parliament. “We need to show investors that Europe is serious about supporting future technologies,” added Mohammed Chahim, another MEP.

The company’s difficulties come at a time when EV demand is slower than expected, and regulatory hurdles continue to impact production timelines. According to Benchmark Minerals Intelligence, Europe’s battery pipeline capacity through 2030 has decreased by 176 gigawatt-hours this year.

Northvolt is now seeking new investors to finance its restructuring and complete major projects in Germany and Canada. The company has engaged Rothschild to explore partnerships, with proposals due by December. If no viable partners are found, Northvolt has enlisted Hilco Global to assist with a potential liquidation.

“We will regret in 20 years if we do not continually lean forward and dare to drive the green transition,” Carlsson said.