Northvolt insolvent in the US, CEO Carlsson resigns
Swedish battery company needs to raise between $1 billion and $1.2 billion to ensure business continuity
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Key points
3' min read
Northvolt, the Swedish start-up considered Europe's spearhead in the production of batteries for electric vehicles, has fallen into an unprecedented crisis. CEO and co-founder Peter Carlsson announced his resignation this morning, a day after the company filed for Chapter 11 bankruptcy protection in the US. Northvolt had about $30 million in available cash, it said in a document, and over $5.5 billion in debt, having raised over $10 billion in funding since its inception.
Northvolt, founded in 2016 and often compared to Tesla in terms of ambition and vision (founders Peter Carlsson and Paolo Cerruti, now former chief operating officer, are both former Tesla managers: Carlsson was vice-president of supply chain, Cerruti worked in the same area), experienced a dramatic turnaround in 2023. The company, which seemed to be the main European candidate to challenge the Asian battery giants (although it was still far from the top ten of the biggest global players, more than one tenth of the capacity of the world leader, China's Catl, followed by Byd and Korea's LG Energy Solution), was hit by production problems, missed internal targets and a serious lack of liquidity. 'The main problem,' said interim chairman Tom Johnstone, 'is that operations are not moving in the right direction. If you look at what we are planning to produce this year and where we are, there is a big gap'.
According to Carlsson's statement, Northvolt now needs to raise between USD 1 billion and USD 1.2 billion (far more than the 300 million budgeted only a few weeks ago) to ensure business continuity. "Chapter 11 allows us to reorganise the company, increase production and meet commitments to customers and suppliers, positioning us for the long term," explained the resigning ceo, who will remain as an advisor and board member.
Emergency Funding and Reorganisation
Northvolt, whose largest shareholder Volkswagen (21%) has partly divested itself by relying on its subsidiary PowerCo, said it only had enough liquidity for one week of operations, but managed to secure $100 million in emergency financing to sustain operations during the bankruptcy proceedings. The company, which employs about 6,600 people in seven countries, plans to complete the restructuring by the first quarter of 2025.
Temporary leadership will be provided by a team of executives, including chief financial officer Pia Aaltonen-Forsell and the president of the battery division, Matthias Arleth, the new chief operations officer.
