Northvolt confirms it will continue operations in Sweden after crisis

Northvolt's shareholders approved the continuation of operations during the staff meeting in Stockholm on Wednesday afternoon, one of the company's press officers told Swedish media.

Public service broadcaster Sveriges Radio was first to report the decision which follows a turbulent 2024 for Northvolt, marked by severe production issues, substantial losses, and workforce layoffs.

The Swedish business is one of Europe's leading battery manufacturers, and with high-profile investors like Volkswagen Group and Goldman Sachs, it has been pivotal in the continent's push to electrify the automotive industry.

However, it has been experiencing acute financial difficulties for months. Last year it applied for bankruptcy in the US, where it had been hoping to expand, after BMW pulled out of a €2bn deal.

Earlier on Wedneday, Impact Loop interviewed Northvolt's press officer, Erik Zsiga, who shared that the board entered the meeting with a clear ambition to keep the company running.

"It might sound dramatic, but this is a legal requirement when equity reaches a certain level. The board's proposal is to continue operations, and that's what we are planning and working towards achieving," Zsiga told Impact Loop.

Selling off parts of the business

Northvolt’s former CEO Peter Carlsson stepped down in November, in the midst of strong public criticism about his leadership.

Zsiga told Impact Loop he attributed Northvolt's precarious situation to macroeconomic shifts and a temporary slowdown in the automotive industry's electrification plans. As a result, the company conducted a strategic review during the autumn.

"One aspect of this is focusing on our core business. We've previously announced that we will seek to divest certain parts of the company," said Zsiga.

Chapter 11 restructuring

Zsiga expressed hope that shareholders would align with the board's recommendation, ahead of the meeting.

"Of course, we cannot pre-empt the shareholders' decision, but we are planning for them to follow the board's proposal," he said.

He also said that Northvolt aims to complete its Chapter 11 restructuring process in the United States within the first quarter of the year. This US bankruptcy procedure, often used for financial reorganisation, highlights the severity of Northvolt’s struggles and the scale of the turnaround effort required.

Northvolt is one of Sweden’s biggest impact employers, with thousands of staff and contractors based in Västerås, near Stockholm, and Skellefteå in northern Sweden.

It has already laid off a fifth of its workforce since its financial problems mushroomed last summer. This includes many global workers who relocated to Sweden to work for the company, attracted by competitive pay offers and the firm's decision to have English as its corporate language.

In December the company announced it had hired German Marcus Dangelmaier, from global electronics company TE Connectivity to run Northvolt's operations in Skellefteå.

Additional reporting by Johann Bernövall.