Northvolt Files for Chapter 11 Bankruptcy Protection

Swedish battery manufacturer Northvolt has filed for Chapter 11 bankruptcy protection in the U.S., marking a significant setback for Europe's ambitions to establish a domestic lithium-ion battery industry. The company, which has struggled with production challenges and financial difficulties, has secured $100 million in financing for its restructuring efforts, expected to conclude by early 2025. Northvolt's cash flow issues were exacerbated by the loss of a $2 billion contract with BMW and a monthly cash burn rate of $100 million. Despite raising $14.26 billion in funding, the firm has faced stiff competition from Chinese manufacturers and slower-than-anticipated growth in the EV market. Partners such as Volkswagen and Scania continue to support Northvolt, indicating potential for recovery. The situation highlights the broader challenges faced by the European battery industry in achieving self-sufficiency in the competitive EV landscape.