Northvolt Files for Bankruptcy
Battery manufacturer Northvolt announced that it has filed for bankruptcy in Sweden, marking a major downfall for one of the most ambitious endeavours to establish a European EV battery giant.
Founded in 2016, Stockholm, Sweden-based Northvolt was established with a goal to develop the “world’s greenest battery,” targeting a minimal carbon footprint, sustainable sourcing of raw materials and recycling.
The company has raised more than $14 billion in capital, including a $5 billion green loan last year, aimed at expanding its Northern Sweden-based lithium-ion battery gigafactory and battery recycling facility. Major shareholders in the company included Volkwagen, with a 21% stake, and Goldman Sachs at 19%. Both companies significantly wrote down the value of their investments in Northvolt last year.
Volvo and Northvolt had announced a joint venture in 2021 to establish a new gigafactory in Europe with a potential capacity of up to 50 gigawatt hours (GWh) per year, with production scheduled to start in 2026. Earlier this year, the companies announced that Volvo agreed to purchase full ownership in the NOVO Energy joint venture.
The bankruptcy filing follows a series of strategic challenges faced by Northvolt, including a significant downshift in EV demand in Europe, with a recent study by S&P Global revising the EU battery-electric vehicle (BEV) 2025 market share forecast down to 21% from its prior 27% expectation. The changes have seen European carmakers have been adjusting their own electrification plans, with Volvo Cars, for example, announcing in September that it is pulling back on its goal to offer only fully electric vehicles by 2030, replacing it with a new 2030 target to have 90% to 100% of its global sales volume consist of “electrified cars,” including fully electric and plug-in hybrids. Volvo cited a series of factors impacting its projected electrification progress, including “a slower than expected rollout of charging infrastructure, withdrawal of government incentives in some markets and additional uncertainties created by recent tariffs on EVs in various markets.”
In its statement announcing the bankruptcy filing, Northvolt outlined other challenges that it has faced in recent months, including rising capital costs, geopolitical instability and supply chain disruptions.
The company also noted internal challenges in its efforts to ramp up production. Shortly before the launch of Northvolt’s strategic review in July, BMW revealed that it had cancelled a €2 billion contract with Northvolt, with reports that the battery manufacturer would not be able to deliver on time, with BMW turning instead to Samsung SDI for EV batteries. Earlier last year, Northvolt chairman Jim Hagemann Snabe stepped down from his role due to health issues.
Tom Johnstone, Interim Chairman of Northvolt’s Board of Directors, described the announcement as “an incredibly difficult day for everyone at Northvolt,” adding that the company “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.”
Johnstone added:
“For me personally, it remains key for Europe to have a homegrown battery industry, but it is a marathon to build such an industry. It needs patience and long-term commitment from all stakeholders.”