Northvolt's Financial Struggles: A Swedish Battery Giant on the Brink

Northvolt, the Swedish battery cell manufacturer for electric vehicles, faces potential bankruptcy in Sweden as funding issues escalate. The company, which sought U.S. Chapter 11 protection last year, needs urgent funding by Wednesday to prevent filing for bankruptcy in Sweden, amid efforts to maintain operations.

Northvolt, a leading Swedish manufacturer of battery cells for electric vehicles, is reportedly on the verge of bankruptcy, Swedish newspaper Dagens Nyheter (DN) disclosed on Tuesday. The company, which sought Chapter 11 protection in the United States last November, is struggling with funding shortages impeding its flagship plant operations in northern Sweden.

According to DN, if Northvolt's board fails to secure new funding by Wednesday, it may file for bankruptcy covering all Swedish operations. This decision could come as early as Tuesday evening. A bankruptcy filing would lead to a court-appointed trustee managing the company, shutting down operations while attempting to find a competent buyer.

Reports indicate that stakeholders, including Volkswagen and Goldman Sachs, are increasingly concerned about the company's collapsing financials. Northvolt's ambitions to lessen European reliance on Chinese battery makers teeter on the edge as its financial debts spiraled to more than $8 billion by the end of January, stalling plant expansion plans.

(With inputs from agencies.)