The chief executive of Northvolt has resigned, after the Swedish battery startup filed for bankruptcy protection in the US.
Peter Carlsson, who has led Northvolt since 2016, will step aside with immediate effect, the company said on Friday. Carlsson said Northvolt, which is widely seen as a leading player in European efforts to build an electric vehicle battery industry, needs to raise between $1bn (£800m) and $1.2bn in order to restore the business.
Northvolt has built a factory in northern Sweden where it hopes to use green energy to produce hundreds of thousands of EV batteries each year. It was the most prominent of a host of European startups hoping to challenge the dominant Asian battery industry.
However, the company has tipped into crisis in recent months as cash ran dry and it experienced problems getting its first factory up and running properly.
Northvolt on Thursday announced it would seek Chapter 11 bankruptcy protection in the US after talks over rescue investments failed. It said it had enough cash to support operations for only about a week and it had secured $100m (£80m) in new financing for the bankruptcy process. It said operations would continue as normal during the bankruptcy.
“Northvolt’s liquidity picture has become dire,” the company said in its Chapter 11 petition, filed in a bankruptcy court in Houston. Northvolt, which has operations in California, has about $30m in cash and about $5.8bn of debts.
The company, which employs about 6,600 staff across seven countries, expects to complete the restructuring by the first quarter of 2025.
In September, Northvolt said it would cut 1,600 jobs in response to “headwinds” blowing through the EV industry. It has also faced criticism for trying to build several factories at the same time, in Sweden, Germany and the US.
Within months, Northvolt has gone from a much-heralded startup to a company struggling to stay afloat by slimming down, and hobbled by production problems, the loss of BMW as an anchor customer and a lack of funding.
Europe has been hoping that Northvolt would reduce western carmakers’ reliance on Asian rivals, which built their dominant position out of decades of experience in making batteries for consumer electronics. Industry leaders include China’s CATL and the EV and battery maker BYD, Japan’s Panasonic and South Korea’s LG.
Northvolt said the $100m was part of $245m in financing support for the bankruptcy. The Swedish truck maker Scania, a shareholder and its biggest customer, has said it will loan $100m to Northvolt to support the manufacturing of EV battery cells in Skellefteå, northern Sweden.
Carlsson, who will remain as a “senior adviser” and a member of the board, said the company had been “like a baby” to him, but that it had struggled to ramp up production.
“In hindsight, we were overambitious on the timing in which we could achieve it,” he added.
The investment group Vargas, a co-founder of Northvolt and one of its largest shareholders, said the bankruptcy would allow the company to address financial challenges and maintain its competitive edge in producing high-performance battery cells.
But EV demand is growing at a slower pace than some in the industry had projected, and competition remains stiff from China, which controls 85% of global battery-cell production, according to International Energy Agency data.
The Swedish deputy prime minister, Ebba Busch, said on X that the government continued to support the EV battery industry and hoped the restructuring would help turn around Northvolt’s fortunes.