Battery cell manufacturer Northvolt is considering applying for bankruptcy protection under U.S. law. According to insiders cited by Reuters, this option is part of a strategic review aimed at preventing insolvency. Chapter 11 proceedings have historically enabled U.S. companies to restructure and safeguard their operations while managing debts.
A Northvolt spokesperson neither confirmed nor denied the reports but stated, “Since the beginning of the strategic review, we have constantly been discussing different options, and that hasn’t changed throughout the process. We communicate results once we have found a conclusion while we continue the dialogue with our stakeholders.”
Recent months have seen increasing challenges for Northvolt. Production delays led to significant delivery issues, resulting in financial strain. Notably, BMW reportedly canceled a multi-billion-euro order due to these setbacks. The combination of canceled orders and the high costs of scaling up production has placed the company in a difficult financial position.
In response, Northvolt initiated a strategic review, implemented cost-cutting measures, and reorganized its management board. Despite these efforts, industry confidence appears to be wavering. Scania, a brand under the Traton Group that planned to source all battery cells for its electric trucks from Northvolt, is reportedly seeking alternative suppliers.
Swedish business newspaper “Dagens Industri” reported that Scania participated in discussions with investors and lenders last week. While talks have stalled, they are expected to continue in the coming days.
Chapter 11 bankruptcy proceedings allow companies to reorganize while protecting them from creditors, provided they are not yet insolvent. A notable precedent is General Motors, which underwent Chapter 11 restructuring in 2009. The process enabled GM to reduce its debts significantly but also led to brand discontinuations, plant closures, and substantial job losses.
