Northvolt CEO quits after company files for bankruptcy

EV battery maker Northvolt, a cornerstone of Europe’s push for battery independence, filed for Chapter 11 bankruptcy in the U.S. on Thursday, citing major cash flow issues and production setbacks.

Driving the news: The company secured $100 million in emergency financing to keep the lights on while it restructures, a process it hopes to wrap up by early 2025.

• Co-founder and former Tesla executive Peter Carlsson has stepped down as CEO, admitting the company was “over-ambitious” in its production goals. 

• CFO Pia Aaltonen-Forsell is stepping in as interim CEO to steer the ship.

The big picture: At one point, Northvolt was Europe’s green energy poster child, partnering with heavyweights like Volkswagen, Porsche, and Scania. Its crown jewel, the Northvolt Ett gigafactory in Sweden, was designed to produce batteries for 600,000 EVs a year.

But the reality didn’t match the ambition.

• Production delays and missed targets eroded investor confidence.

• Losing a $2.1 billion contract with BMW earlier this year only made things worse.

• A 20% global workforce cut was another red flag, showing how dire the situation had become.

Between the lines: Northvolt’s struggles are unfolding against the backdrop of China’s dominance in battery production, thanks to their cost advantages and scale.

• Northvolt was key to Europe’s plan to reduce dependence on Asian suppliers and meet skyrocketing EV demand. Its bankruptcy leaves a big question mark in that strategy.

What’s next: Northvolt’s survival plan is ambitious:

1. The company is seeking $1 – 1.2 billion in new investments. Automakers looking for stable battery supplies and financial institutions betting on Europe’s EV future are likely targets. Without this funding, liquidation is on the table.

2. And the primary focus will be on stabilizing the Swedish plant, Northvolt Ett, while scaling back projects in Germany and Canada.

Bottom line: The clock is ticking. The restructuring process will need to rebuild trust, boost production efficiency, and secure funding — all without derailing Europe’s broader electrification goals.

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