The Dramatic Downfall of Northvolt: From European Battery Champion to Bankruptcy

The turbulent history of Northvolt, once Europe's beacon of hope in battery technology, resembles a Scandinavian thriller. Founded in 2016, the Swedish start-up aimed to challenge the dominance of Asian companies in the battery market. However, the company now finds itself forced to file for Chapter 11 bankruptcy protection in the USA. Northvolt, established by former Tesla managers Peter Carlsson and Paolo Cerruti, promised to leverage the affordable green energy of the Nordic countries to compete against major Asian players like CATL and BYD. Supported by significant European industrial companies such as Volkswagen, BMW, Scania, Siemens, and ABB, the initial phase seemed promising. The order backlog exceeded 55 billion USD, and the company raised 15 billion USD in capital. Yet, disagreements, management issues, and location disadvantages ultimately led to production and safety problems at the factory in Skellefteå, Sweden. These issues could not be overcome despite increasing financial investments. Carlsson himself admitted failing to curtail the expansion plans in time. The challenges of coordinating new processes and international staff became stumbling blocks. The situation escalated when a tragic accident at the factory claimed the life of an employee, followed by BMW canceling a major contract. In light of these developments and the withdrawal of government support by the Swedish government, Northvolt had little choice but to file for bankruptcy. Despite the pessimism of some investors, Carlsson still sees a future for Northvolt. By selling business units and clearly focusing on existing strengths, he hopes to steer the company out of the crisis. Meanwhile, European automotive manufacturers like BMW are already shifting their orders to Asian producers. The future of the company remains uncertain as the competition does not rest.