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., and said it has secured $100 million in new financing for the process.
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.
Northvolt said operations will continue as normal during the bankruptcy, and said it expects to complete the restructuring by the first quarter of 2025. Northvolt filed its Chapter 11 petition in U.S. bankruptcy court in Houston.
The filing by Europe's most developed battery player is the biggest blow yet to Europe's hopes of building its own EV battery sector, reducing Western carmakers' reliance on Chinese rivals such as CATL (300750.SZ) and BYD (002594.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 said on Thursday that it was loaning $100 million to Northvolt to support the manufacturing of electric vehicle battery cells in Skellefteå.
But growth in EV demand is moving at a slower pace than some in the industry had projected, and competition remains stiff from China, which controls 85% of global battery cell production, International Energy Agency data shows.
In October, Northvolt struck a deal that gave access to a small amount of money while talks on a bigger financing package continued, business daily DI reported.
Those talks had become more difficult in recent weeks, one of the sources familiar with the Chapter 11 plan said.
In recent years several Swedish companies have opted for filing for Chapter 11 protection such as Scandinavian airline SAS and debt collector Intrum, a process that allows management to retain control over the company and run its operations.
In October, a source with knowledge of Northvolt's plans said the company was looking to raise some $300 million, which would carry it into 2025 if successful.
But this amount was far less than the 15 billion Swedish crowns that Swedish media had reported Northvolt was aiming for a few months ago, or even the scaled-back ambition of 7.5 billion crowns reported in September.
Deputy Prime Minister Ebba Busch told Reuters on Tuesday the Swedish government did not plan to take a stake in Northvolt.
