NorthVolt Sells Industrial Division for $6m, Files for Bankruptcy

European battery startup Northvolt, which has raised over $15 billion in funding over the last decade, is facing financial difficulties. The company has filed for bankruptcy in Sweden and is selling its industrial division for a mere $6 million. The Chapter 11 bankruptcy proceedings in the US this week saw a consortium of buyers offering $6 million for the Industrial and Energy Storage System business, with additional funds allocated for assumed liabilities and to avoid extra costs.

Alongside the bankruptcy filing of the parent company Northvolt AB in Sweden, several subsidiaries including Northvolt Ett AB, Northvolt Labs AB, Northvolt Revolt AB, and Northvolt Systems AB have also filed for bankruptcy. The main shareholders in NorthVolt include German car maker Volkswagen, US bank Goldman Sachs, BMW Spain, Vattenfall in Sweden, and ABB Technology Ventures in Switzerland.

The $6 million valuation for the industrial business raises concerns about the overall bankruptcy process. However, the sale will provide a new company with advanced battery technology for electric vehicles and access to battery gigafactories in various stages of development. Tom Johnstone, interim chair at Northvolt, expressed hope that the technology, expertise, and commitment to sustainability built by the company will continue to drive change in the industry.

Despite the challenges, Northvolt had been making efforts to stay afloat by selling off parts of the business. The company had achieved milestones such as ramping up production, reducing operational cash outflow, and delivering its first one million battery cells to a European customer. Johnstone emphasized the importance of a homegrown battery industry in Europe and highlighted the need for patience and long-term commitment from stakeholders.

The Chapter 11 process resulted in a consortium of businesses acquiring the Northvolt Systems Industrial division, which develops and manufactures battery systems for heavy industry and off-highway market segments. The division employs around 300 people and has supplied customers in various sectors. Following the acquisition, operations at Northvolt Systems Industrial will continue, and existing orders will be executed as planned.