Northvolt, the Swedish maker of battery cells for electrical autos, has filed for Chapter 11 chapter safety within the US, dealing a blow to Europe’s hopes that its most developed battery participant would scale back western carmakers’ reliance on Chinese language rivals.
Northvolt stated it had sufficient money to help operations for less than a few week and it had secured $100m (£80m) in new financing for the chapter course of. It stated operations would proceed as regular in the course of the chapter.
“Northvolt’s liquidity image has develop into dire,” the corporate stated in its Chapter 11 petition, filed in a chapter court docket in Houston. Northvolt, which has operations in California, has about $30m in money and about $5.8bn of money owed.
The corporate, which employs about 6,600 workers throughout seven international locations, expects to finish the restructuring by the primary quarter of 2025.
In September, Northvolt stated it might lower 1,600 jobs in response to “headwinds” blowing by way of the electrical automotive business.
Inside months, Northvolt reworked from Europe’s greatest shot at a homegrown EV battery champion to an organization struggling to remain afloat by slimming down, hobbled by manufacturing issues, the lack of an enormous buyer and an absence of funding.
Europe has been hoping that Northvolt would scale back western carmakers’ reliance on Chinese language rivals such because the battery maker CATL and the EV and battery maker BYD.
Northvolt stated the $100m was a part of $245m in financing help for the chapter. The Swedish truck maker Scania, a shareholder and its largest buyer, has stated it can mortgage $100m to Northvolt to help the manufacturing of EV battery cells in Skellefteå, northern Sweden.
Tom Johnstone, the interim chair of Northvolt’s board, stated: “This decisive step will permit Northvolt to proceed its mission to determine a homegrown, European industrial base for battery manufacturing.” He additionally famous the help the corporate had acquired from lenders and prospects.
As a part of the restructuring, Northvolt would consider proposals for brand new cash funding from strategic and monetary buyers, in addition to present lenders, shareholders and prospects, he stated.
The funding group Vargas, a co-founder of Northvolt and one in every of its largest shareholders, stated the chapter would permit the corporate to handle monetary challenges and keep its aggressive edge in producing high-performance battery cells.
Northvolt has led a wave of European startups investing tens of billions of {dollars} in battery manufacturing to serve the continent’s automakers as they change from internal-combustion engines to EVs.
However EV demand is rising at a slower tempo than some within the business had projected, and competitors stays stiff from China, which controls 85% of world battery-cell manufacturing, in accordance with Worldwide Power Company information.
The Swedish deputy prime minister, Ebba Busch, stated on X that the federal government continued to help the EV battery business and it hoped the restructuring would assist flip round Northvolt’s fortunes.
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