🇸🇪🇪🇺🔋 Northvolt has led a wave of European startups investing tens of billions of dollars in battery production to serve the continent's automakers as they switch from internal-combustion engines to EVs.
But EV demand is growing at a slower pace than some in the industry had projected, and competition remains stiff from China, which controls 85% of global battery-cell production.
Northvolt said the $100 million in a new loan is part of $245 million in financing support for the bankruptcy. Swedish truck maker Scania, a shareholder and its biggest customer, said on Thursday that it was loaning $100 million to Northvolt to support the manufacturing of electric vehicle battery cells in Skellefteå, northern Sweden.
"This decisive step will allow Northvolt to continue its mission to establish a homegrown, European industrial base for battery production," Tom Johnstone, interim chairman of Northvolt's board, said in a statement, noting the support Northvolt has received from existing lenders and customers.
As part of the restructuring, Northvolt will evaluate proposals for new money investment from strategic and financial investors, as well as existing lenders, shareholders and customers, he said.
Volkswagen, Northvolt's top shareholder with a 21% stake, said it had taken note of the filing and was in close contact with the Swedish firm. It declined to comment on potential repercussions on its own business.
Despite Northvolt's attempts at creating an industry of battery manufacturing in Europe without relying on Chinese-made components, the company failed and signed a partnership with the Chinese firm Wuxi Lead, and thus, Northvolt began building "European" batteries which were actually made in China.
Then problems soon arose as the machinery which was using Northvolt's batteries were breaking down far too easily leading some suspect industrial sabotage from China. Because the batteries were now unreliable, demand fell, and it started Northvolt's financial troubles which culminated today with bankruptcy.
Meanwhile, the company resorted to bringing 500 workers from China to Sweden to remedy its operations, but it was too little too late. With Northvolt's collapse, so do the dreams of the EU of becoming independent from Chinese EVs.
🔗 https://www.reuters.com/technology/northvolt-files-chapter-11-bankruptcy-us-2024-11-21/
But EV demand is growing at a slower pace than some in the industry had projected, and competition remains stiff from China, which controls 85% of global battery-cell production.
Northvolt said the $100 million in a new loan is part of $245 million in financing support for the bankruptcy. Swedish truck maker Scania, a shareholder and its biggest customer, said on Thursday that it was loaning $100 million to Northvolt to support the manufacturing of electric vehicle battery cells in Skellefteå, northern Sweden.
"This decisive step will allow Northvolt to continue its mission to establish a homegrown, European industrial base for battery production," Tom Johnstone, interim chairman of Northvolt's board, said in a statement, noting the support Northvolt has received from existing lenders and customers.
As part of the restructuring, Northvolt will evaluate proposals for new money investment from strategic and financial investors, as well as existing lenders, shareholders and customers, he said.
Volkswagen, Northvolt's top shareholder with a 21% stake, said it had taken note of the filing and was in close contact with the Swedish firm. It declined to comment on potential repercussions on its own business.
Despite Northvolt's attempts at creating an industry of battery manufacturing in Europe without relying on Chinese-made components, the company failed and signed a partnership with the Chinese firm Wuxi Lead, and thus, Northvolt began building "European" batteries which were actually made in China.
Then problems soon arose as the machinery which was using Northvolt's batteries were breaking down far too easily leading some suspect industrial sabotage from China. Because the batteries were now unreliable, demand fell, and it started Northvolt's financial troubles which culminated today with bankruptcy.
Meanwhile, the company resorted to bringing 500 workers from China to Sweden to remedy its operations, but it was too little too late. With Northvolt's collapse, so do the dreams of the EU of becoming independent from Chinese EVs.
🔗 https://www.reuters.com/technology/northvolt-files-chapter-11-bankruptcy-us-2024-11-21/