Northvolt, once hailed as Europe’s answer to Chinese battery dominance, has filed for bankruptcy in Sweden, marking one of the largest corporate collapses in the country’s modern history.
The Swedish battery manufacturer, which employed around 5,000 people—primarily in Skellefteå submitted its bankruptcy petition to the Stockholm District Court (Stockholms tingsrätt) on Wednesday. The decision follows a prolonged financial struggle and unsuccessful attempts to secure additional capital.
Northvolt’s financial rescue efforts fail
Northvolt had been under severe financial pressure since late 2024, when it sought bankruptcy protection under the U.S. Chapter 11 process. Despite attempts at restructuring and receiving liquidity support from creditors, the company ultimately failed to secure the necessary financial conditions to continue operations.
“After an exhaustive attempt to explore all available means to secure a viable economic and operational future for the company, the board of Northvolt AB has today filed for bankruptcy in Sweden,” the company stated in an official announcement.
Billions lost in Sweden’s largest bankruptcy
The bankruptcy of Northvolt represents a significant financial blow, with total debts amounting to approximately 60 billion SEK (€5.3 billion). The failure is particularly devastating for Swedish pension funds, as the four AP funds (AP-fonderna), which manage Swedes’ pension money, had collectively invested 5.8 billion SEK (€510 million) in the company. The Danish pension fund ATP, which manages the pension savings of most Danes, also invested 2.3 billion DKK (€310 million), most of which is now considered lost.
Suppliers and subcontractors had claims of around 2.5 billion SEK (€220 million), adding to the financial chaos surrounding the company’s downfall.
From green energy promise to financial collapse
Founded with the goal of providing a European alternative to Asian battery giants, Northvolt was envisioned as a key player in the transition to sustainable energy. The company had secured major investments from governments and private entities, positioning itself as a cornerstone of the European Union’s battery strategy.
However, escalating production costs, competition from cheaper Chinese alternatives, and economic turbulence ultimately undermined its ability to deliver on these ambitious goals. The firm had long been struggling with liquidity issues and delays in production at its Skellefteå Gigafactory.
What does Northvolt’s bankruptcy mean for Europe’s battery market?
Northvolt’s bankruptcy raises concerns about Europe’s ability to establish a self-sufficient battery supply chain. The company was seen as a crucial step in reducing the continent’s reliance on Asian battery producers. Now, the collapse may deter future investors from large-scale green industrial projects in Europe.
While the Swedish Government has not yet announced any measures in response, industry experts speculate that policymakers may seek to salvage parts of Northvolt’s infrastructure for future battery initiatives.
As the dust settles on Northvolt’s dramatic failure, questions remain about the future of Europe’s clean energy ambitions and whether the region can compete with the dominance of Chinese and American battery manufacturers.
