Northvolt in the crisis: bankruptcy application and uncertain future of the factory!

northvolt, a Swedish battery producer, has filed for bankruptcy and is faced with considerable financial difficulties. The company applied for a chapter 11 insolvency proceedings in the United States at the end of November 2024 after debt of around 5.7 billion euros. Despite these challenges, Northvolt records the plans to build a battery factory in Schleswig-Holstein. This factory, which was announced in January 2024, was to be funded with millions of euros and created 3000 jobs. Federal Minister of Economics Robert Habeck said that the future of this project now depends on other investors and that ongoing discussions are held with potential donors.

Habeck justified in the discussion about bankruptcy and explained that the problems of the company only became known after the contract was signed. The financial foundations of Northvolt were previously checked by the PWC consulting company, which estimated the risk of default for the KfW loan to just one percent. The view of experts that the declining demand for electric cars in Europe has reinforced Northvolt's financial problems, the uncertainty around the future of the project continues to grow.

project progress despite bankruptcy

Despite the bankruptcy, the construction of the new factory in Dithmarschen continues. The application for the renovation process was submitted to the Bankruptcy Court in Houston. At a first hearing on December 20, 2024, the procedure was not yet open, but the creditors, including Volkswagen and the KfW Förderbank, show interest in continuation. This change bond of 600 million euros is half secured by the federal government and half from the state of Schleswig-Holstein. However, experts expect that the claims of the creditors, including the KfW, could be cut back considerably.

The production problems in the main factory in North Sweden became public in the second half of 2024 and led to BMW canceled a major order. Due to difficulties in compliance with delivery contracts and a high committee rate of up to 30 percent, experts Northvolt see back behind Chinese manufacturers. Despite these setbacks, the company plans to win further investors in the first half of the year and at the same time rely on support from the federal and state governments. A total of around 700 million euros in direct funding are planned, depending on the progress of the project.