Sweden’s Northvolt files for bankruptcy, in blow to Europe’s EV ambitions By Reuters

By Dietrich Knauth, Marie Mannes and Terje Solsvik

(Reuters) -Northvolt, the Swedish maker of battery cells for electric vehicles, said on Thursday it has filed for Chapter 11 bankruptcy protection in the U.S., dealing a blow to Europe’s hopes that its most developed battery player would reduce Western car makers’ reliance on Chinese rivals.

Northvolt said it has only enough cash to support its operations for about a week and said it has secured $100 million in new financing for the bankruptcy process. It said operations will continue as normal during the bankruptcy.

“Northvolt’s liquidity picture has become dire,” the company said in its Chapter 11 petition, filed in U.S. Bankruptcy Court in Houston. The company, which has operations in California, has about $30 million of cash, which can only support its operations for about a week and $5.8 billion in debts.

Northvolt said it expects to complete the restructuring by the first quarter of 2025.

Northvolt went in a matter of months from being Europe’s best shot at a home-grown electric-vehicle battery champion to racing to stay afloat by slimming down, hobbled by production problems, the loss of a major customer and a lack of funding.

Europe has been hoping that Northvolt would reduce Western car makers’ reliance on Chinese rivals such as CATL and BYD (SZ:).

Northvolt said the $100 million in a new loan is part of $245 million in financing support for the bankruptcy. Swedish truck maker Scania, a shareholder and its biggest customer, said on Thursday that it was loaning $100 million to Northvolt to support the manufacturing of electric vehicle battery cells in Skellefteå, northern Sweden.

“This decisive step will allow Northvolt to continue its mission to establish a homegrown, European industrial base for battery production,” Tom Johnstone, interim chairman of Northvolt’s board, said in a statement, noting the support Northvolt has received from existing lenders and customers.

As part of the restructuring, Northvolt will evaluate proposals for new money investment from strategic and financial investors, as well as existing lenders, shareholders and customers, he said.

Investment group Vargas, a co-founder of Northvolt and one of its largest shareholders, said the bankruptcy would allow the company to address its financial challenges and maintain its competitive edge in producing high-performance battery cells.

Handelsbanken analyst Hampus Engellau said the bankruptcy filing would give the company…