The company and its assets will be sold after it filed for bankruptcy in Sweden, sinking Europe’s best hope for competing against Asian rivals.
Northvolt, Europe’s biggest hope for producing batteries in the region to power the transition to electric vehicles, will be split up and sold after it filed for bankruptcy on Wednesday in its home country, Sweden.
The company, which just a few years ago appeared to be Europe’s best chance to compete against Chinese rivals, filed for Chapter 11 bankruptcy protection in the United States last year in an attempt to buy it more time to raise money.
But securing funds proved too difficult. On Wednesday, Northvolt said in a statement that a court-appointed Swedish trustee would take over the process of selling off its business and assets.
The company’s subsidiaries Northvolt Germany and Northvolt North America are not part of the bankruptcy proceedings in Sweden.
Founded in 2016 by a former Tesla executive, Northvolt has been struggling for months, cutting jobs and restructuring operations even before it sought bankruptcy protection.
“Despite pursuing all available options to negotiate and implement a financial restructuring, including a Chapter 11 restructuring process in the United States, and despite liquidity support from our lenders and key counterparties, the company was unable to secure the necessary financial conditions to continue in its current form,” Tom Johnstone, the company’s interim chairman, said in a statement.
European carmakers get their batteries from South Korea’s LG Energy Solution and Samsung, as well as the world’s leading producer, CATL of China. Northvolt sought to capture 25 percent of the European battery market by 2030.
Last year, the company was able to secure a $5 billion loan from the European Union to expand its production.
But it was still not enough to counteract the challenges the company faced, from accidents at a plant in Sweden to the loss of a contract with BMW worth 2 billion euros, or $2.15 billion.