The Swedish battery maker Northvolt, once seen as Europe’s strongest competitor to Chinese battery manufacturersbet monkey, filed for bankruptcy protection in the United States on Thursday.
The company has been struggling financially for months, cutting jobs and restructuring operations. Founded in 2016 by a former Tesla executive, Northvolt said filing for Chapter 11 bankruptcy would allow it to “restructure its debt, appropriately scale the business to current customer needs and secure a sustainable foundation for continued operation.”
The company has faced a series of challenges this year. They began with accidents at a plant in Sweden and the loss of a contract with BMW worth 2 billion euros, or $2.15 billion, in June. In September, Northvolt announced plans to pause its production of cathode materials — one of the basic building blocks of a battery — at a factory in Skelleftea, Sweden.
Two planned factories in Germany and Canada are financed separately and will continue to operate outside the bankruptcy process, the company said. Northvolt’s factories in Sweden will remain open and continue to make deliveries and pay vendors and employees, the company added.
The filing was made in U.S. Bankruptcy Court for the Southern District of Texas, and the company said it expected to emerge from the process in the first quarter of next year.
“Despite near-term challenges, this action to strengthen our capital structure will allow us to capture the continued market demand for vehicle electrification,” Tom Johnstone, the company’s interim chairman, said in a statement.
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