Battery Company Northvolt Files For Bankruptcy
The battery company Northvolt has faced production problems and economic losses recently. The majority of the company's employees work at the factory in Skellefteå in Northern Sweden, at which mass firings were heralded in the fall. (Photo: Northvolt)
After major losses and production issues, the battery company Northvolt has declared bankruptcy in Sweden. The bankruptcy affects the company's factory in Skellefteå, Northern Sweden, among other locations.
The board of Northvolt AB announced on Wednesday morning that the company has declared bankruptcy in Sweden.
"Despite pursuing all available options to negotiate and implement a financial restructuring, including a Chapter 11 restructuring process in the United States, and despite liquidity support from our lenders and key counterparties, the company was unable to secure the necessary financial conditions to continue in its current form," writes the company in a press release.
Challenging situation
"The Board therefore determined that this is the only available solution while the company pursues all realistic options to obtain financing to continue operating during the Swedish bankruptcy process," the company adds in the press release.
Northvolt refers to several complex challenges in the past months that have corroded the company's financial position, including increased capital costs, geopolitical instability, ongoing disturbances in the supply chain, and changes in market demand.
In addition to this backdrop, the company has faced significant internal challenges in its increase of production.
Impacts the Northern Swedish factory
The bankruptcy on Wednesday impacts the companies Northvolt AB, Northvolt Ett AB, Northvolt Labs AB, Northvolt Revolt AB, and Northvolt Systems AB.
Northvolt Germany and Northvolt North America have not declared bankruptcy.
Northvolt Ett is the company's gigafactory for producing lithium-ion batteries, located in the northern Swedish city of Skellefteå, where mass layoffs were announced this fall.
The company has about 5,000 employees in Sweden, and most work at the factory in Skellefteå.
Tom Johnstone, Interim Chairman of Northvolt’s Board of Directors, commented:
“This is an incredibly difficult day for everyone at Northvolt. 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," comments Tom Johnstone, Interim Chairman of Northvolt’s Board of Directors.
“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," he adds.
The article will be updated.