The Swedish battery cell manufacturer Northvolt, once set up to set up independent battery cell production for electric cars in Europe, is seeking protection under Chapter 11 of bankruptcy law in the USA. The financially troubled company announced this on Thursday.
The restructuring process protects the company of co-founder and CEO Peter Carlsson (54) from access by its creditors for a certain period of time, thereby making it easier to get a new financial start. The battery manufacturer currently urgently needs money and has been working with its investors on a rescue package for several weeks
. The Swedish government recently declared that it did not want to take over shares in Northvolt.
According to the court documents, Northvolt currently only has liquid assets of $30 million – which is said to be barely enough for a week. At the same time, the mountain of debt now stands at $5.8 billion.
In the process, the company wants to restructure itself in order to ensure its survival. Thanks to the rules, Northvolt now has access to new sources of financing, including $145 million that had previously been set aside as collateral. In addition, the Swedish truck manufacturer Scania agreed to provide Northvolt with a $100 million loan. The money comes in the form of debtor-in-possession (DIP) financing, a specialized type of financing for companies that are restructuring through a Chapter 11 process, Northvolt said.
Factories in Germany and Canada financed separately
Northvolt Ett, the company’s flagship battery factory in Skellefteå, northern Sweden, and Northvolt Labs in Västerås, are expected to remain operational. The Carlsson team wants to continue trying to ramp up production there. The German and American subsidiaries for the planned factory projects in Heide, Schleswig-Holstein, and in Canada are financed separately and will “continue to work as usual outside of the Chapter 11 process,” the company said. The restructuring is expected to be completed in the first quarter of 2025.
“This critical step will enable Northvolt to continue its mission to build a European industrial base for battery manufacturing,” said Tom Johnstone, interim chairman.
The start-up, founded in Sweden in 2016 by ex-Tesla man Peter Carlsson and Paolo Cerruti, has never made a profit and is struggling with quality problems and delays. In June BMW therefore withdrew an order worth two billion euros
, as manager magazine found out exclusively at the time. The quality of the cells was not yet stable enough and the delivery date had moved too far back, BMW said. Due to a collapse in orders and problems ramping up production, the group had recently massively scaled back its expansion plans. laid off thousands of employees and subsidiaries sold.
The federal and state governments are supporting Heide with 700 million euros
At the beginning of the year, the EU Commission approved funding and guarantees worth 902 million euros for the billion-dollar project in Heide. The federal government and the state of Schleswig-Holstein are supporting the construction of the battery factory with around 700 million euros. There are also possible guarantees for a further 202 million euros. An administrative agreement stipulates that state funds of 137 million euros should initially flow. But that hasn’t been the case so far. The federal government accounts for around 564 million.
Northvolt’s largest shareholder is Volkswagen, also the US investment bank Goldman Sachs and BMW are among the owners. Volkswagen said on Thursday evening that it was in close contact with Northvolt; The German car manufacturer had repeatedly been involved in possible rescue plans in the previous weeks.
There is a lot at stake not only for Northvolt, Carlsson and its investors, but also for its customers – and thus for the entire European auto industry. Chinese dominance, especially through CATL, is growing; only a few Korean companies can currently keep up. Car manufacturers are threatened with a dangerous dependency on battery cells, the engines of the future.