Battery-maker Northvolt files for bankruptcy, leaving gigafactory construction plans in tatters

The company had already filed for Chapter 11 bankruptcy protection in the US in November last year.

In January 2024, it announced that it had raised US$5 billion to expand its Swedish factory to become what it claimed would be the “first circular gigafactory in the western world”.

The plan was to expand cathode production and cell manufacturing at Northvolt Ett in northern Sweden, as well as an adjacent recycling plant, Revolt Ett.

The deal was raised on the back of long-term offtake contracts totalling $55 billion from partners including BMW, Scania, Volvo and Volkswagen, backed by 23 commercial banks, as well as the European Investment Bank (EIB) and the Nordic Investment Bank (NIB). But the company pulled the plug on the proposals later that year, as it struggled to get the existing facility up and running.

On Wednesday (12 March) it announced that it was filing for bankruptcy in Sweden after an “exhaustive effort” to secure a viable future for the company.

It cited a “series of compounding challenges” in recent months that have eroded its financial position, including rising capital costs, geopolitical instability, supply chain disrupctions, and shifts in market demand.

It also blamed “significant internal challenges” in ramping up production in a complex industry.

Northvolt AB, Northvolt Ett AB, Northvolt Labs AB, Northvolt Revolt AB and Northvolt Systems AB filed with the Swedish court. Northvolt Germany and Northvolt North America are not filing for bankruptcy in their respective jurisdictions.

Tom Johnstone, interim chairman of Northvolt’s board of directors, said, “This is an incredibly difficult day for everyone at Northvolt.”

He added, ““Through the recent months, Northvolt has refocused its operations and reached several achievements. We ramped up production to meet customers’ needs, reduced operational cash outflow by 55%, made tough decisions to pause or delay expansion plans, completed divestitures and ultimately delivered our first one million battery cells to a European customer.”

He continued, “We are hopeful that the foundation we built — the technology, the expertise, and the commitment to sustainability — will continue to drive change in the industry.”