- EV battery maker Northvolt filed for bankruptcy on Wednesday.
- The Swedish company, founded by two ex-Tesla executives, struggled amid stuttering demand for EVs.
- It was widely seen as Europe's hope for an EV battery manufacturer to rival Asian automakers.
Northvolt, the electric vehicle battery maker founded by two former Tesla executives, has reached the end of the road after failing to secure additional funding.
The Swedish company's board announced the bankruptcy on Wednesday, saying that it had "explored all available means to secure a viable financial and operational future for the company."
Northvolt said it faced multiple challenges in recent months that undermined its financial position, including growing capital costs and geopolitical instability, resulting in supply chain disruptions and fluctuating demand.
Despite support from lenders and filing for Chapter 11 bankruptcy protection in November, the company failed to achieve the financial conditions required to continue operating.
A Swedish court-appointed trustee will now oversee the sale of the business and its assets.
"This is an incredibly difficult day for everyone at Northvolt," Northvolt's interim chair, Tom Johnstone, said in a statement.
"We set out to build something groundbreaking — to drive real change in the battery, EV, and wider European industry and accelerate the transition to a green and sustainable future."
European setback
Northvolt aimed to become Europe's main EV battery manufacturer and counter the dominance of Chinese rivals such as CATL and BYD.
It was founded in 2016 by Peter Carlsson and Paolo Cerutti and had raised more than $15 billion from investors including Volkswagen, Goldman Sachs, BlackRock, Baillie Gifford, and Spotify cofounder Daniel Ek.
Northvolt grappled with escalating debts, operational efficiencies, and a reliance on Chinese equipment that hindered its production capabilities.
The bankruptcy affects Northvolt AB and its Swedish subsidiaries.
Northvolt's German and North American businesses are not filing for bankruptcy in their respective jurisdictions, though the court-appointed trustee and company lenders will determine their future.
The collapse comes as European automakers struggle with weak demand for EVs and rising competition from Chinese rivals.
Volkswagen, Europe's largest automaker, is considering closing factories in Germany for the first time and cutting tens of thousands of jobs due to weak EW demand and excess capacity.
Last week, Mercedes-Benz announced staff buyouts and half-salary reductions to improve earnings following a decline in sales in 2024.
Ford, meanwhile, said last November it would cut 4,000 jobs in Europe by the end of 2027.
