Swedish battery manufacturer Northvolt on Wednesday announced it has filed for bankruptcy in Sweden after failing to secure financing to continue operations.

The filing comes after “an exhaustive effort” to secure a viable financial and operational future for the company, following its Chapter 11 bankruptcy procedure in the US last November.

The Swedish court filing covers Northvolt, Northvolt Ett, Northvolt Labs, Northvolt Revolt and Northvolt Systems. Northvolt Germany and Northvolt North America are not filing for bankruptcy in their respective jurisdictions, Kallanish learns.

“This is an incredibly difficult day for everyone at Northvolt,” says interim chairman Tom Johnstone. “We set out to build something groundbreaking – to drive real change in the battery, EV and wider European industry and accelerate the transition to a green and sustainable future.”

“The outcome is especially hard considering not only the level of engagement and interest we held with potential partners and investors in recent months, but also the clear improvement and upwards trajectory that we have been seeing in Northvolt’s production in Skellefteå,” he says.

Cell output from serial production lines has doubled at the flagship gigafactory, with the team securing a 50% improvement in production yield since September, says Johnstone.

Without providing names, Northvolt says it “found significant traction with potential partners and interest from investors” but with limited time and financial resources available, it was unable to conclude the agreements to secure its future.

“We are hopeful that the outreach we have undertaken with potential investors during the Chapter 11 process will accelerate identifying the necessary financing to allow continued trading under the Swedish bankruptcy process,” adds Johnstone.  

Earlier this week, Scania – Northvolt’s main customer – said it had recently secured supplies from other battery makers. The truckmaker, which invested in Northvolt in 2018, noted its vehicle production had been impacted by technological challenges, including the supply of batteries by Northvolt.

Northvolt’s bankruptcy is another blow to Europe’s ambitions for a homegrown battery industry, following previous failures such as Britishvolt, Italvolt and more recently, Freyr. Currently, over 90% of battery production in the EU is controlled by Asian manufacturers. Additionally, 40% of the announced gigafactory investments in the region come from Chinese or South Korean companies.

“Three years after the US IRA, Europe still doesn’t have a comprehensive policy to localise battery production,” Julia Poliscanova, senior director, vehicles & emobility at T&E, says in an emailed statement. “Negligible battery tariffs and no production aid and content requirements mean it’s easy just to import. The Auto Plan has some vague language on all of this, but what we need is urgent action now.”

While Asian manufacturers could potentially find Northvolt an attractive acquisition opportunity, Poliscanova believes Europe should welcome such investment into battery plants locally, but ensure strict rules around technology and skills transfer to avoid becoming “an assembly plant.”