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.
