Sweden’s leading electric vehicle battery maker Northvolt filed for Chapter 11 bankruptcy protection in the U.S. on Thursday, a blow for Europe’s plans to cut reliance on Chinese battery providers. Dire financial conditions meant that only USD 8 million was enough to keep the company afloat for a week, with the balance owing to suppliers, the company said.
US Bankruptcy Court in Houston as it filed for bankruptcy, Northvolt said it had USD 30 million in cash but was weighed down by USD 5.8 billion of debt. Part of the process, Northvolt has secured USD 100 million in new financing to get it through the bankruptcy proceedings, which it’s aiming to complete by Q1 2025. During the restructuring period, operations will continue.
But since production has proved difficult, key customers left (Lithium Corp.), and the funding dried up, Northvolt’s rapid rise as Europe’s brightest hope for homegrown battery supplier has slowed. The automakers in Europe were hoping for the company to wean itself off the likes of CATL and BYD, which are the giants of the global battery market.
Swedish truck manufacturer Scania, Northvolt’s largest customer, has loaned USD 100 million to help support battery production in Skellefteå, Sweden, in an effort to stabilise. Volkswagen, which has a 21 percent stake in Northvolt, expressed concern that the filing but declined to comment on the potential effect on its operations.
Northvolt has some breathing room after filing for bankruptcy, but it’s yet to be determined the company can truly be viable in the long run. The global EV Battery market is characterised by fierce competition, with Chinese firms claiming 85 percent of global production. However, Northvolt’s bankruptcy demonstrates the challenges facing European companies trying to beat Chinese dominance.
Swedish officials have pledged continued support for the EV battery sector, with Deputy Prime Minister Ebba Busch expressing hope that Northvolt’s restructuring will restore its financial health, although the government has no plans to take a stake in the company.
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Publish date : 2024-11-21 23:56:00
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The post Swedish battery maker Northvolt files for bankruptcy, threatening Europe’s EV future first appeared on Love Europe.
Author : love-europe
Publish date : 2024-11-22 07:59:37
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