Swedish battery firm Northvolt filed for U.S. Chapter 11 bankruptcy protection Thursday, with CEO Peter Carlsson stepping down the following day.
Northvolt needs to raise between $1 billion and $1.2 billion to restore itself to full operations, Carlsson told Reuters and other media Friday. On Thursday, the company said it only had enough cash to support operations for about a week, and that it had secured $100 million in financing to take it through the bankruptcy process, according to Reuters.
Rendering of Northvolt Six battery factory in Quebec, Canada
In its Chapter 11 filing, Northvolt said it expected to complete the restructuring required by the bankruptcy process by the first quarter of 2025. Carlsson told reporters that the bankruptcy process will give the company time to reorganize itself and ramp up operations, while honoring customer and supplier commitments.
Carlsson will remain on the company’s board and will take on a new senior advisor role. The company has reportedly started searching for a new CEO, and will be led by current CFO Pia Aaltonen-Forsell for the time being.
Volvo and Northvolt partner on battery development and production
Northvolt was the subject of high hopes for the establishment of a local EV battery industry for Europe. It opened its first battery factory in Sweden in 2021, and that year claimed to be making battery cells with 100% recycled nickel, manganese, and cobalt. Battery-supply deals with BMW and Volvo, as well as for a Canadian battery factory, soon followed.
But Northvolt has faced several setbacks recently. In June BMW cancelled its battery deal, estimated to be worth about $2 billion, and in September Northvolt announced a strategic review and cost cuts, including suspension of cathode active material production at its first factory. That plant never reach full production capacity, Reuters reported at the time.