Northvolt CEO Peter Mikael Carlsson is standing on the construction site for the new Northvolt Gigafactory electric car battery factory in front of excavators and wind turbines on March 25, 2024 in Lohe-Rickelshof, Germany.
Gregor Fischer | Getty Images News | Getty Images
The chief executive of Northvolt stepped down on Friday, shortly after the Swedish battery maker filed for Chapter 11 bankruptcy protection in the U.S.
Peter Carlsson, who co-founded Northvolt and led the firm since its inception in 2016, will step aside to take on a role as senior advisor, the company said. He remains a member of Northvolt’s board.
On Thursday, the company sought bankruptcy protection in the U.S. to allow it to restructure its debt, scale back its business and secure a sustainable foundation for its continued operation.
The move represented a major setback to Europe’s electrification ambitions.
Once one of Europe’s most valuable privately held tech firms, Northvolt said it would continue functioning as normal during the restructuring process, which is expected to finalize in the first quarter of next year.
“Today marks a significant new phase for Northvolt as well as for me personally,” Northvolt’s Carlsson said in a statement.
“The Chapter 11 filing allows a period during which the company can be reorganized, ramp up operations while honoring customer and supplier commitments, and ultimately position itself for the long-term. That makes it a good time for me to hand over to the next generation of leaders,” he added.
Northvolt said Thursday that the reorganization of the company would help it access approximately $245 million in new financing, totaling around $145 million in cash and $100 million debtor-in-possession financing — a type of loan that is provided to companies in financial distress.
Northvolt Ett, the company’s flagship battery gigafactory in Skellefteå in north Sweden, will remain operational, the business said.
It added that the restructuring process will ultimately help Northvolt’s long-term mission to create a Western industrial base for battery production.
Workers walk at the site of the Northvolt Ett factory in Skelleftea, north Sweden on February 23, 2022.
Jonathan Nackstrand | Afp | Getty Images
“This decisive step will allow Northvolt to continue its mission to establish a homegrown, European industrial base for battery production,” said Tom Johnstone, interim chairman of Northvolt’s board.
“Despite near-term challenges, this action to strengthen our capital structure will allow us to capture the continued market demand for vehicle electrification,” he added.
Cost-cutting drive
A partner of major European automakers, Northvolt produces lithium-ion batteries for the blooming electric vehicle industry, which has recently been rocked by intensifying competition from the likes of China.
The Stockholm-based business has long been regarded as Europe’s best hope of building a homegrown EV battery champion. More recently, however, the company has been struggling to stay afloat while navigating a major cost-cutting drive.
In September, Northvolt announced plans to reduce its global workforce by around 20% and its Swedish personnel by 25%.