Companies highly indebted: Northvolt insolvency: Uncertainty about battery plans at Heide

After the bankruptcy application by the battery manufacturer Northvolt in his Swedish homeland, the future of the planned factory in Schleswig-Holstein is also uncertain. The company in Germany should continue. But the billion dollar project, which started almost a year ago, is a 100 % subsidiary of the Swedish parent company. “I can’t say more at this point,” said Northvolts-Interims supervisory board chairman Tom Johnstone in the morning.

The highly indebted battery manufacturer Northvolt filed for bankruptcy at a Stockholm court. The step therefore includes all Swedish units, but not the German and American subsidiaries.

The construction work for the Northvolt factory near Heide is to continue for the time being. However, all decisions would be made by an insolvency administrator appointed by the court, Northvolt reported. The company proposed Mikael Kubu as a trustee. It is unclear how long the bankruptcy proceedings will take according to Swedish law.

Thousands of fear for jobs

Now the employees in northern Germany and 5,000 Northvolt employees in Sweden are worried about their jobs. Most work in the factory site in the small North Swedish community of Skellefteå. “It is an incredibly difficult day for everyone at Northvolt,” said Johnstone.

“After extensive efforts to explore all available funds to secure a sustainable financial and operational future for the company, the Northvolt Supervisory Board announced from today that the company has filed for bankruptcy in Sweden,” said the group’s statement. Like many companies in the battery sector, a number of challenges have been experienced in recent months with consequences for their own financial situation, including rising capital costs, geopolitical instability and supply chain problems. In addition, internal challenges when it comes to rising production came.

Monthly crisis at Northvolt

Northvolt was a great hope for the European automotive industry for a long time as a producer of the batteries for electric cars. After initiating an expansion course and several setbacks such as the withdrawal of a billion -dollar order for battery cells by the car manufacturer BMW, the group had to row back vigorously and finished with financing problems and high debts.

In September 2024, the company announced that it was estimated to relieve 1,600 employees in Sweden and put several expansion plans on hold. Two months later, it finally applied for creditor protection in the United States: With a restructuring procedure in accordance with Chapter 11 of US bankruptcy law, the Swedes wanted to protect themselves from claims by creditors and at the same time find a financially viable way to the future as an independent company – without success, as is now shown.

According to Northvolt, all of the negotiation and restructuring efforts have not used anything to ensure the financial framework for continuing the company in Sweden in its current form. It was therefore concluded that the bankruptcy application was the only solution while looking at all realistic options so that the operation could continue during the Swedish bankruptcy proceedings.

After the start of the Chapter 11 procedure, Germany boss Christofer Haux assured that the German location enjoys the highest priority. According to schedule, the first cell assembly at Heide is to begin in the second half of 2027 before the factory gown should start afterwards.

At the beginning of 2024, the EU Commission approved funding and guarantees of over 902 million euros for the work in Schleswig-Holstein. The federal government and the state of Schleswig-Holstein wanted to support the construction of the battery factory with around 700 million euros. In addition, possible guarantees were planned for another 202 million euros. Northvolt has already received around 600 million euros from the state sponsoring bank KfW, for the federal and state governments. The bankruptcy could be expensive for the federal government and the state of Schleswig-Holstein.