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Northvolt’s chief executive has resigned a day after Europe’s big battery hope filed for bankruptcy, warning that the continent’s green industrial transition is at risk from dithering policymakers, carmakers and investors.
Peter Carlsson, a former Tesla executive who co-founded Northvolt in 2016, admitted to mistakes at the start-up, but urged Europe to look beyond the current weakness in electric car sales and not to abandon its dream of creating a battery champion to fight dominant Asian rivals.
“There’s more hesitation and questions on the speed of the transition from carmakers, from policymakers, and from the investment community. That affects us. We will regret in 20 years if we do not continually lean forward and dare to drive the green transition,” he told reporters.
One long-time Northvolt investor added: “This ought to be the proper fuel for crisis meetings at the European level . . . The comparison with the deeply long thought out and united policy that the Chinese are showing on this score is even more concerning.”
Northvolt was Europe’s best-funded start-up, having raised more than $15bn from investors and governments, but was left with just $30mn in cash — enough to operate for a week — before its bankruptcy filing under US Chapter 11 rules that gives it protection from creditors.
The Swedish group became a symbol for Europe’s green transition and the continent’s efforts to protect its automotive industry, which employs almost 14mn, by competing in electric vehicle technology against well-established Chinese companies such as CATL and BYD.
Christian Ehler, a conservative Bavarian MEP, said: “Northvolt’s Chapter 11 filing, albeit partly caused by questionable entrepreneurial decisions, is symptomatic of the problems that European clean tech companies face.”
He added: “Next to the erosion of our existing industrial base, we are now faced with the washing away of our clean tech ambitions.”
Right-wing parties, strengthened by EU-wide elections in June, are increasingly questioning the continent’s green agenda amid deep concerns about burdensome red tape, job losses and plant closures and in the face of fierce global competition and high costs.
Mohammed Chahim, a Dutch MEP, said: “If it was a bank we would have stepped in as governments but if it is a key tech for the future there is a bit more hesitance. We need to show investors that we take these technologies in Europe seriously.”
Northvolt gathered more than $50bn in orders from automotive groups such as Volkswagen, BMW, Scania and Porsche, but failed to ramp up production quickly enough at its sub-Arctic factory in Skellefteå in northern Sweden.
But it said late on Thursday that it was filing for bankruptcy with $5.8bn in debts, so that it could access $145mn in cash and $100mn in fresh financing from truckmaker Scania. It is now looking for one or more investors to provide it with future financing to exit Chapter 11.
Northvolt needed about $1bn-$1.2bn to continue as a going concern after Chapter 11, Carlsson said.
“The Chapter 11 filing allows a period during which the company can be reorganised, ramp up operations while honouring customer and supplier commitments, and ultimately position itself for the long term. That makes it a good time for me to hand over to the next generation of leaders,” Carlsson added.
Tom Johnstone, Northvolt’s interim chair, said: “We are incredibly thankful to Peter for his vision and dedication to building Northvolt from an unprecedented idea to becoming Europe’s battery manufacturing champion.”
Northvolt said it would start looking for a new chief executive immediately, and that Carlsson would remain on its board and as a senior adviser.
Current and former employees have told the Financial Times that the fall of Northvolt was due to a litany of issues, from mismanagement and overspending to poor safety standards and over-reliance on Chinese machinery.