One of the subsidiaries of Swedish battery maker Northvolt is filing for bankruptcy, following a decision by the company to halt expansion of its factory in Skellefteå in northern Sweden, according to a press release.
Northvolt Ett Expansion, a development company which has no direct employees, was tasked with expanding the factory in Skellefteå with an additional capacity of 30 GWh, compared to its current capacity of 16 GWh, reported Swedish news outlet DI.
Its expansion was halted in September. The company also laid off 1,600 people company-wide last month,1,000 of whom worked at the Skellefteä site.
The company has faced a difficult 2024, with shareholder BMW pulling a billion-dollar battery order in June, citing production delays. There have also been concerns over worker safety after deaths at the company's facility in northern Sweden, and its most recent losses reaching into the billions.
Northvolt also published an ‘initial strategic review’ into its operations last month, outlining a new plan to double down on accelerating battery production at its Northvolt Ett manufacturing centre.
Ett Expansion, one of 20 different units within Northvolt, will now be managed by bankruptcy trustees, said Northvolt in a press release. The bankruptcy filing does not affect any of Northvolt’s other operations.
“Northvolt Group continues to be in dialogue with stakeholders for continued cooperation within Northvolt Group’s ongoing operations,” Northvolt said in the press release.
“Looking forward, the Northvolt Group is concentrating its resources towards accelerating production in large-scale cell manufacturing within the fully-built, first phase of Northvolt Ett and delivering on commitments to its automotive customers,” it added.
Northvolt, which is Europe’s best-financed climate tech with €11bn raised in debt and equity, has had difficulties closing its next round of funding.
Governments have pledged over €2.7bn to the Swedish gigafactory since its founding, but only €531m of that is confirmed to have gone into the company’s bank account, Sifted reported.
In January this year the European Investment Bank (EIB) pledged €943m in debt financing to support the planned expansion of Northvolt Ett; €453m of that was part of a $1.5bn package, secured by a guarantee from Riksgälden, the Swedish National Debt Office, meaning, should Northvolt default, Riksgälden would cover the debt — in this case up to 80%.
It’s a significant chunk of cash, but it is yet to be handed over and "it will not be done in the near future either," a spokesperson for Riksgälden told Sifted. The money was ring-fenced for the expansion of Northvolt Ett.