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Swedish battery manufacturer Northvolt announced today that it has filed for bankruptcy in the United States, which dealt a blow to Europe’s ambitions in the field of domestic lithium-ion batteries.
Company It is said She elected Chapter 11 in an attempt to straighten out her finances.
Northvolt, which has soared for years on the back of strong fundraising and a series of announcements about new facilities, has stumbled recently. It laid off 1,600 employees, about 20% of its workforce, in September, and offloaded assets in November from its ill-fated purchase of Bay Area battery startup Cuberg.
The company has raised $14.26 billion, according to PitchBook, including a $1.2 billion round in 2023 to expand its North American operations. But that was not enough to continue the cash-starved operation. Company It is said He was burning $100 million a month. When BMW pulled out of a $2 billion contract in June after Northvolt failed to deliver it on time, bankruptcy became almost inevitable.
This isn’t the first time a battery manufacturing startup has hit a rough patch — A123 Systems failed more than a decade ago Stand out A notable example is in the United States – and likely not the last. Making lithium-ion cells is extremely difficult, requiring deep knowledge of chemistry, production equipment, and quality improvement. Even leading companies suffer from costly problems, sometimes amounting to a billion dollars. Northvolt’s bankruptcy is likely more a sign of poor execution than of lower-than-expected demand for electric vehicles.
Is this the end of the Swedish company? Not necessarily. On the one hand, Volkswagen owns part of the company and has made a big bet on electric cars, for which it will need millions of cells. In addition, Europe, like other advanced economies, was rushing to stake a claim in battery manufacturing, and Northvolt seemed to have its best chance of competing with Asian rivals. It may still be the case, perhaps with the help of one of these competitors through some sort of partnership, but first it must get its house in order.
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