On Wednesday (March 12), local time, Northvolt, the largest battery company in Europe and a Swedish power battery company, announced on its official website that it had filed for bankruptcy in Sweden due to the company's cash depletion. This statement also means the collapse of Europe's dream of building a local battery industry.
The Swedish company filed for bankruptcy protection in the United States in November last year. The company originally hoped to complete the restructuring in the first quarter of this year to obtain funds for sustainable operations.
Northvolt said on Wednesday that despite seeking all available options to negotiate and implement financial restructuring, including bankruptcy protection restructuring procedures in the United States; despite the liquidity support provided by lenders and major transaction parties, the company still cannot obtain the necessary financial conditions to continue operating in its current form.
In recent months, Northvolt has experienced a series of complex challenges that have eroded its financial situation, including rising capital costs, geopolitical turmoil, supply chain disruptions, and changes in market demand.
Tom Johnstone, interim chairman of Northvolt, claimed: "This is an extremely difficult day for everyone at Northvolt. We were determined to build a groundbreaking business that would drive change in batteries, electric vehicles and the entire European industry, and accelerate the transition to a green and sustainable future." According to the latest disclosed documents, as of January 31, the total debt of Northvolt's nine affiliated companies in bankruptcy proceedings has exceeded the $8 billion mark. This is one of the largest bankruptcies in Swedish corporate history and the most high-profile bankruptcy since Saab Automobile went bankrupt more than 10 years ago. Northvolt was once one of the most valuable private technology companies in Europe and was considered a key link in shaping the European electric vehicle industry and establishing an independent supply chain for electric vehicle batteries. Therefore, it has been strongly supported by European authorities and the automotive industry in the past few years. Since its establishment in 2016, the company has received more than $10 billion in equity, debt and public financing. Its largest shareholders include Volkswagen, which holds a 21% stake, and Goldman Sachs, which holds a 19% stake. Earlier last year, Northvolt obtained a $5 billion green loan for the expansion of a large factory, but the funds were later cancelled due to the company's growing problems.
In June last year, German automaker BMW canceled a $2 billion order because Northvolt failed to fulfill a battery supply contract signed in 2020.
"It's clear that Northvolt has a lot of problems, and now our members are paying the price," said Marie Nilsson, leader of the Swedish trade union IF Metall. About 1,800 members of the IF Metall union are affected by the bankruptcy.
According to Swedish bankruptcy law, the court-appointed trustee will lead the subsequent asset liquidation, including the disposal of existing assets and the maximum repayment of debts.
Porsche, which has a supply contract with Northvolt, said that after learning that Northvolt was about to go bankrupt, the company had begun looking for alternatives. "We still believe that Europe needs capable battery developers."