Swedish battery developer and manufacturer Northvolt has filed for bankruptcy protection in the United States, in a move that was followed a day later by the resignation of the company’s founder CEO, former senior Tesla executive Peter Carlsson.
It’s a significant move because Northvolt was one of the brightest hopes for Western electric carmakers that were looking to reduce their reliance on China battery giants. The company raised more than $10 billion, but was unable to land long term contracts with major car makers or compete with Chinese competitors.
Northvolt makes a range of battery products including lithium-ion and sodium-ion cells, electric vehicle (EV) battery cells, and batteries for standalone storage. Last year it hailed a breakthrough in sodium-ion batteries, which the company said would enable the expansion of cost-efficient and sustainable energy storage systems around the globe.
Its filing for Chapter 11 is designed to facilitate approximately $US145 million in cash collateral and a further $US100 million debtor-in-possession financing, which would be added to a $US100 million promised late last week by Swedish truck maker Scania, a shareholder and Northvolt’s biggest customer.
Tom Johnstone, the interim chairman of the board, said the company is not giving up on its hopes to play a key role in the transition to electric vehicles.
“Despite near-term challenges, this action to strengthen our capital structure will allow us to capture the continued market demand for vehicle electrification,” he said in a statement. “We are likewise pleased by the strong support we have received from our existing lenders and our customers.”
Northvolt, with operations in California, reportedly has only $US30 million in cash, enough only to support operations for around a week. The company also has debts worth $US5.8 billion.
Carlsson, who was a former Tesla executive and co-founded Northvolt in 2016, will stay on as a member of the board and senior advisor.
“Today marks a significant new phase for Northvolt as well as for me personally,” said Carlsson in a statement.
In remarks to reporters, Carlsson described the financing situation “incredibly complicated” and that the company needs to raise around $US1.2 billion to get back on track.
Joshua S. Hill is a Melbourne-based journalist who has been writing about climate change, clean technology, and electric vehicles for over 15 years. He has been reporting on electric vehicles and clean technologies for Renew Economy and The Driven since 2012. His preferred mode of transport is his feet.