Northvolt’s Chapter 11: Impact on Europe’s Battery Industry

Battery Technology has been covering Northvolt’s journey since its inception. From acquiring the Silicon Valley lithium-metal battery innovator Cuberg to battery recycling initiatives like the one with ABB and investing $5 billion in a Li-ion battery factory in North America, Northvolt has been at the forefront of innovation. However, the company recently announced plans to cut 1,600 jobs in Sweden while reaffirming its commitment to its Quebec battery plant. Unfortunately, Northvolt has filed for Chapter 11 reorganization in the US, enabling access to approximately $245 million in new financing.

Northvolt and Chapter 11

Northvolt AB and its subsidiaries have announced that it has voluntarily filed for Chapter 11 reorganization in the US, enabling the company to restructure its debt, align operations with customer needs, and secure a sustainable foundation for growth. The process allows Northvolt to access approximately $145 million in cash collateral and $100 million in debtor-in-possession financing from an existing customer.

Operations will continue as usual during the reorganization, including customer deliveries, vendor obligations, and employee wages. Northvolt’s flagship facilities in Sweden—Northvolt Ett and Northvolt Labs—remain operational, while subsidiaries in Germany and North America, financed independently, are unaffected.

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The Chapter 11 process, distinct from other forms of bankruptcy, provides a platform for Northvolt to engage with strategic and financial investors, lenders, and stakeholders to secure additional investments. The restructuring is expected to conclude by Q1 2025, positioning the company to meet market demand for vehicle electrification and sustainable growth.

Interim Chairman Tom Johnstone emphasized the move as essential for Northvolt’s mission to establish a robust European battery industry, citing strong lender and customer support. Johnstone continued, "Throughout this process, we will focus on meeting our commitments to our stakeholders, including our employees, customers, suppliers and the governments of the countries in which we operate.” The filings, made in the US Bankruptcy Court for the Southern District of Texas, include motions to maintain critical operations and payments throughout the process.

Northvolt's CEO and co-founder stepped down

Peter Carlsson, co-founder and CEO of Northvolt, resigned a day after the company filed for Chapter 11 bankruptcy, signaling a critical moment for the once-promising Swedish battery manufacturer. "Personally, this is an emotional day," Carlsson stated, describing Northvolt as "like a baby" to him, according to Reuters.

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The company’s financial troubles, including $5.8 billion in debt and just $30 million in cash at the time of filing, forced it into a court-led restructuring. The process allows Northvolt to reorganize its finances, secure $245 million in interim financing, and continue operations while seeking $1–1.2 billion in additional funds. However, Reuters noted that production problems and over-ambitious goals undermined Northvolt’s efforts, with only one production line at its Swedish gigafactory fully operational.

Interim leadership will be handled by CFO Pia Aaltonen-Forsell and Matthias Arleth, president of battery cells, while the search for a new CEO begins. Carlsson remains on the board as an advisor. Despite setbacks, Europe remains invested in developing its battery industry to reduce reliance on Chinese suppliers like CATL and BYD. “Europe has a strategic interest in a European battery industry,” European Investment Bank Vice President Tomas Ostros told Reuters.

What are social media users saying?

One social media user believes that nobody can beat the Chinese battery supply chain:

Another social media user hopes Northvolt does not follow the path of Britishvolt:

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This social media user hopes to keep the only cell manufacturer completing Québec's battery value chain.

The future of Northvolt’s global competitiveness

Northvolt’s Chapter 11 filing signals a critical moment for the European battery industry and its global competitiveness. While the move allows Northvolt to restructure debts and secure much-needed financing, it highlights the challenges of scaling up battery production in Europe, where the supply chain and infrastructure are still maturing. Competing against entrenched Asian giants like CATL and BYD, which benefit from well-established ecosystems, Northvolt’s ability to regain momentum will depend on its execution of the restructuring plan and operational improvements.

The temporary leadership transition and Carlsson's departure add uncertainty, potentially affecting investor and customer confidence. However, the company’s flagship gigafactories in Sweden and its commitments in North America and Germany suggest that Northvolt still has strategic assets to leverage. Northvolt could emerge stronger if successfully restructured, but the prolonged process could leave it vulnerable to market shifts, slower EV adoption or stronger competitors gaining ground.