Swedish Battery Manufacturer Northvolt Files for Chapter 11 Protection in the US
A Blow to European Electric Vehicle Ambitions
Swedish battery manufacturer Northvolt has filed for Chapter 11 protection in the US, dealing a significant blow to European ambitions in the electrification of its automotive sector.
As a partner to major European car manufacturers, Northvolt produces lithium-ion batteries for electric vehicle manufacturers, an industry shaken by increased competition.
The Stockholm-based company was long considered Europe's best hope for creating a European champion in electric vehicle batteries. However, in recent times, the company has struggled to stay afloat while implementing a massive cost-cutting campaign. Now, its voluntary bankruptcy filing will allow it to restructure its debt, reduce its activities, and ensure a sustainable basis for continuing operations. The company has stated that it will continue to operate normally during the restructuring process, which is expected to be completed by the first quarter of 2025. This procedure will enable Northvolt to preserve its goal of establishing a European industrial base for battery production.
The sector continues to struggle in Europe. Foreign competition is also fierce, particularly from China. A Chinese electric vehicle is significantly cheaper to produce than a European one, although Chinese suppliers have a generation's lead over Europeans in terms of technology. The stakes are high, and economies are at the mercy of the Asian giant.
