The Swedish manufacturer of batteries for electric vehicles (EVs) ceases production at its main plant in Sweden in June. It is phasing out production in the coming period.
Northvolt was supposed to offer an alternative to large battery manufacturers from China as a European manufacturer of EV batteries. However, the company found itself in dire straits as demand for EV batteries proved weaker than expected, partly due to disappointing demand for EVs. This forced the company to file for bankruptcy in March.
Despite this bankruptcy, the receiver hoped that Northvolt's production could continue while another buyer was sought. However, the number of Northvolt's customers has fallen sharply; currently, only Scania is Northvolt's customer. The battery manufacturer is therefore now forced to wind down its production.
Development and production of lithium-ion batteries
Northvolt is a Swedish company founded in 2016 by Peter Carlsson, who previously worked as a manager at Tesla. The company specialises in the development and production of lithium-ion batteries. These are aimed not only at electric vehicles (EVs), but also at industrial applications and power grids.
The first production site, Northvolt Ett in Skellefteå, Sweden, has been operational since 2022. The company is also developing battery plants in Heide, Germany, and Quebec, Canada. In Gdańsk, Poland, Northvolt produces complete battery solutions for industrial applications and energy storage. It is headquartered in Volthouse, Sweden.
As recently as April last year, Northvolt started construction of a new battery plant in the German state of Schleswig-Holstein. This plant, due to be operational in 2026, aims to produce battery cells with an annual production capacity of 60 GWh. This would bring the company's total production capacity to more than 170 GWh per year.
Focus on sustainability
Sustainability is an important aspect in Northvolt's manufacturing process. The company aims to produce the greenest batteries for EVs, industry and the power sector, including through the use of wind energy. The choice of the municipality of Heide in Schleswig-Holstein was partly based on the availability of both onshore and offshore wind power, as well as renewable energy through connections to Denmark and Norway.
However, the Swedish battery manufacturer has been in financial trouble for some time. Demand for batteries from EV manufacturers has declined, leading, among other things, to BMW cancelling a €2bn order and Scania postponing deliveries. The declining demand from customers is partly due to disappointing demand for EVs and fierce competition from Chinese EV manufacturers.
Deferred payment requested in US
Northvolt filed for a moratorium in the US in 2024 and filed a Chapter 11 bankruptcy petition in the state of Texas. This is a legal process in which a company seeks protection from creditors to restore its financial position.
Chapter 11 is often used by larger companies experiencing financial difficulties, aiming to continue operations through restructuring and reorganisation. With the Chapter 11 filing, Northvolt wanted to create room for raising financial resources to strengthen its financial position.
Jobs cut and plant construction halted
Northvolt also cut some 1,600 jobs and halted construction of a new plant in Sweden in an attempt to keep its head above water. However, these measures proved insufficient, and Northvolt was forced to file for bankruptcy in March. This filing only affects the Swedish branch of the company; Northvolt also has a US and German branch. A trustee will look into a possible sale of the Swedish branch.
Image: the Northvolt Ett plant in Skellefteå, Sweden (source: Northvolt)
