Swedish electric vehicle (EV) battery manufacturer Northvolt AB has announced that its operations will proceed as normal despite filing for Chapter 11 bankruptcy in November 2024. The company’s shareholders recently voted to continue business activities while it works to secure new funding under the U.S. restructuring process, which is expected to conclude by the first quarter of 2025.
The shareholder vote, held this week at an extraordinary general meeting (EGM) in Stockholm, decided the company’s future direction. Northvolt had previously been facing significant financial challenges, with debts amounting to approximately $5.8 billion (€5.62 billion) and a cash reserve of just $30 million (€29.10 million) at the time of filing. The company had only enough cash to operate for a week before its bankruptcy submission. Despite these financial woes, the vote to continue operations marks a critical moment for Northvolt, which specializes in the production of lithium-ion, sodium-ion, and lithium-metal cells for energy storage and electric mobility.
A Northvolt spokesperson expressed optimism following the vote, saying, “Northvolt is pleased with the results of today’s EGM, at which shareholders voted to affirm the continuation of Northvolt’s business. This is a positive outcome that demonstrates the support of our shareholders as we seek to realise our ambition and maximise our value.”
The company’s shareholders include major industry players such as Volkswagen, BMW, Baillie Gifford Funds, AMF, and Goldman Sachs Asset Management. As part of its recovery strategy, Northvolt is actively seeking new investors to bolster its finances. The company has already been working on increasing production capacity, with its flagship battery gigafactory, Northvolt Ett, located in Skellefteå, Sweden.
Northvolt had been one of the European Union’s most promising EV battery manufacturers before encountering financial difficulties. The company’s troubles have dealt a blow to the EU’s ambitions to become a leading player in the global EV battery market, a position it hoped to achieve by competing with established producers in China. However, the company has faced significant production setbacks, escalating competition from China, and challenges securing funding.
China has a dominant position in the global battery supply chain, particularly with critical materials such as graphite, cobalt, and lithium. Additionally, Chinese manufacturers benefit from government subsidies, a support system European governments have yet to match, which has left many domestic battery makers struggling. Europe also lags behind competitors in terms of EV charging infrastructure, further compounding the challenges for companies like Northvolt that are trying to build a robust domestic battery production network.
As Northvolt works through its restructuring process, it remains a key player in the EU’s push to reduce reliance on foreign battery producers and bolster the continent’s electric vehicle ecosystem.
