Northvolt to continue operation with downsized workforce

After filing for bankruptcy in its home country mid March, Northvolt, the European battery manufacturing hopeful, has been given a new lease of life. The company’s bankruptcy trustee said Monday it had reached an agreement in principle with its key stakeholders for financial guarantees. These will allow Northvolt to maintain a scaled-down continuation of operations in Sweden.

Its scaled-back operation will employ around 1,700 of its staff, down from around 5,000 employees Northvolt had when it filed for bankruptcy. Mikael Kubu, president at judicial reorganization specialists Ackordscentralen, said that some additional people would be employed in foreign subsidiaries, without revealing any details.

“Despite major cutbacks, it is positive that the business can continue to some extent, which is probably crucial for being able to sell the business in whole or in part,” Kubu said in a statement. He confirmed that the agreement will be formalized in the coming days.

On March 12, Northvolt said in a statement that it had been unable to “secure the necessary financial conditions to continue in its current form” in Sweden. Previously, the business filed for Chapter 11 bankruptcy protection in the United States in November 2024 and embarked on a debt restructuring process and search for new sources of funding.

The company was Europe’s best funded start-up, having raised around $15 billion since founded in 2016, but was down to its last $30 million, according to the Swedish filing.

In December 2021, Northvolt became the first manufacturer to produce battery cells fully designed, developed and assembled by a homegrown European battery company. Those first cells rolled off its manufacturing lines at Northvolt Ett in Skellefteå, Sweden.