Agency Report –
Kiel, Germany – The future of battery manufacturer Northvolt’s planned factory in northern Germany has been cast into doubt after the Swedish company filed for bankruptcy on Wednesday.
Operations for Northvolt’s German subsidiary are to continue, but the billion-dollar factory project is wholly owned by the Swedish parent company, raising questions about what impact the bankruptcy proceedings might bring.
“I can’t say any more at this point,” Northvolt’s interim supervisory board chairman, Tom Johnstone, said on Wednesday morning.
The debt-ridden Swedish electric vehicle battery manufacturer said on Wednesday it has filed for bankruptcy with the court in Stockholm.
The move includes all of the group’s Swedish units, but not its subsidiaries in the United States and Germany, a statement said.
Northvolt acknowledged it has suffered from “a series of compounding challenges,” including rising capital costs, geopolitical instability, supply chain disruptions and shifts in market demand.
The company said it also faced “significant internal challenges in its ramp-up of production, both in ways that were expected by engagement in what is a highly complex industry, and others which were unforeseen.”
Northvolt was once seen as a potential major European rival to the Chinese companies that make most of the world’s electric vehicle power cells. Some of Northvolt’s key stakeholders included BMW, Volkswagen and Goldman Sachs.
The company has been in trouble for months. In November it filed for Chapter 11 protection in the United States, a process that allows it to take steps to restructure its debt.
But Wednesday’s statement said that Northvolt Germany and Northvolt North America “are not filing for bankruptcy in their respective jurisdictions.”
“This is an incredibly difficult day for everyone at Northvolt,” Johnstone said separately.
German plant still under construction
Construction work on the Northvolt factory near the northern German town of Heide, which was launched just under a year ago, is to continue for the time being.
However, all decisions will be made by an insolvency administrator appointed by the court, Northvolt reported.
The company has proposed Mikael Kubu as trustee. It is unclear how long the insolvency proceedings under Swedish law will last.
As a producer of batteries for electric cars, Northvolt was long regarded as a great hope for the European automotive industry. However, the company’s ambitious and costly expansion plans have been marred by setbacks.
German luxury carmaker BMW, for example, pulled out of a multibillion-euro order for vehicle battery cells, which contributed to Northvolt’s financing problems.
Following the start of the Chapter 11 bankruptcy proceedings in the US last year, Christofer Haux, Northvolt Germany’s chief executive, assured that the German site would be given top priority.
The first cell assembly at Heide is scheduled to start in the second half of 2027 before the factory ramp-up begins.
At the beginning of 2024, the European Commission approved funding and guarantees of €902 million ($984 million) for the plant, located in the German state of Schleswig-Holstein.
German government subsidies for construction are expected to total around €700 million, with possible further guarantees of €202 million.
Northvolt has already received around €600 million from the German state-owned development bank KfW, half of which is guaranteed by the federal government and half by Schleswig-Holstein.
That means the company’s bankruptcy could prove expensive for the German public.
By Steffen Trumpf and André Klohn
