Stockholm, November 24: Swedish EV battery maker Northvolt, after announcing a couple of rounds of layoffs this year, filed for bankruptcy with a debut of USD 5.8 billion. According to reports, the collapse of the company was a blow to Europe's bid to stand up in the EV supply chain. The battery maker had become a hope for the future of electric vehicles in the European region. 

Bloomberg reported that Northvolt AB's fall towards bankruptcy began in June 2024 when BMG AG cancelled a "multi-billion dollar" order. This order was very important for the company, and with the cancellation, Northvolt was scrambled to keep the finances flowing. However, it is reported that the German automobile industry already struggled and was going through a crisis and not keeping up with the market. Ford Layoffs: US-Based Automobile Giant Planning Job Cuts of 4,800 Employees in Germany, UK Amid Its Struggles With Passenger Vehicle, Lower Demand.

The Northvolt layoffs were announced as the company struggled, and hundreds of jobs were cut as part of efforts to save costs. The report mentioned that the investors had poured USD 10 billion into the company and later found that only USD 30 million in cash was left. On Thursday, the Swedish EV battery company filed for bankruptcy, which reportedly set back the European industry against competitors from South Korea and China.

Northvolt CEO Peter Carlsson resigned amid the crisis and warned the EU about the risks of it slowing down on the green projects. He also said the company needed USD 1.2 billion to finance its new business plan. He told the reporters about regret if the company did not drive the transition towards cleaner tech. The Northvolt investors hoping to get cash returns were warned in a call from one of the company owners about running out of cash. GM Layoffs: General Motors Lays Off Hundreds of Workers Globally, Employee of 38 Years Gets Termination Email at 5 AM.

The report said the Sweden-based EV battery maker was facing a task of restructuring and focusing more on operations to emerge from its Chapter 11 bankruptcy. Amid the delay in its IPO, delays in building budgets, and construction projects, the company reportedly tried hiding that it was running out of cash. The battery maker also tried to assure the investors by announcing the Skelleftea plant expansion in northern Sweden.

(The above story first appeared on LatestLY on Nov 24, 2024 05:03 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).