“First and foremost, this was necessary to capitalize and drive the company forward,” Carlsson said. “Essentially, Northvolt is crucial for both our customers and for Europe’s green transition. The recapitalization allows us to emerge from this process with a simpler capital structure.”
Northvolt’s downward spiral began over the summer when BMW canceled a contract worth €2 billion. The next blows came fast, with Volvo saying it would take over its joint venture with Northvolt as soon as it finds an investment partner.
In September, Northvolt announced it was laying off 1,600 people, or a quarter of its workforce in Sweden, and suspending its gigafactory expansion project.
But the biggest setback came from Volkswagen, which is Northvolt’s top investor and holds 21 percent of the company. The German automaker is facing a financial crisis of its own with slowing sales in China and negotiations with union workers over layoffs and potential plant closures.
Despite the Chapter 11 filing, the company’s flagship gigafactory in Skellefteå, Sweden, and Northvolt Labs in Västerås, Sweden, will remain operational. Northvolt Germany and Northvolt North America will also continue operating, with the company saying that a C$7 billion factory being planned for Quebec is still on track.
“There are many questions about the speed of the green transition and Europe’s role. It’s essential to keep pushing forward,” Carlsson said. “We’ll regret it in 20 years if we don’t accelerate the transition and create a strong European market with strong European champions.”
