Northvolt, an insolvent battery cell manufacturer, is discontinuing production at its main plant in Skellefteå, Sweden. Most recently, the factory only served a single customer, truck manufacturer Scania. The doors will shut by June 30 at the latest, and 900 people could lose their jobs. However, the company insists that work on the German Heide site is ongoing despite restructuring concerns.
Bankruptcy trustee Mikael Kubu says that although the search for a buyer for the production plant, known as Northvolt Ett, is progressing, it is not foreseeable that a buyer will take over production soon. For this reason, production will now gradually be scaled down and discontinued by the end of June.
According to the Swedish TV station SVT, some 900 people currently work at the factory, even though, at the end of March, Northvolt said that 1,200 of the 3,000 people in Skellefteå would keep their jobs. However, as the battery maker only had Scania left as a customer, the end of production was foreseeable.
A Scania press spokesperson told SVT: “Unfortunately, this is no longer financially viable for Scania”. In other words, battery cells from the underutilised factory have become too expensive in the course of the insolvency proceedings.
Not produced in Europe
The Scania spokesperson did not want to directly confirm rumours that Scania would purchase its battery cells from the Chinese battery giant CATL in the future, but said: “Today, Northvolt and the bankruptcy trustee are announcing that they are discontinuing production. Then we shouldn’t be standing here talking about other suppliers.”
However, it was clear that there is no longer any battery production of this calibre in Europe, yet the Scania spokesperson continued. Scania’s parent company, Volkswagen, which is also a major shareholder in Northvolt, is currently building its own cell factories in Salzgitter (Germany), Sagunto (Spain), and outside Europe in St. Thomas (Canada) under the name PowerCo.
A series of bad news
The announced end of Northvolt’s battery production follows a series of bad news: the company has been struggling with quality problems since the start of production in Skellefteå at the end of 2022. There were still far too many production rejects by the summer of 2024, which increased the cost and kept the production volume of cells ready for delivery far below plan. This ultimately led to Northvolt shareholder BMW cancelling an order worth billions.
A short time later, Northvolt divested its first subsidiaries due to empty accounts. However, the situation continued to deteriorate: in November 2024, Northvolt filed for Chapter 11 restructuring, and CEO Peter Carlsson resigned. But that didn’t help much either, and in March, the parent company, Northvolt AB, and several subsidiaries in Sweden filed for insolvency.
This was followed at the end of March by the news that around 2,800 of Sweden’s 4,500 employees would lose their jobs, including at the main plant in Skellefteå.
What about Heide?
What will happen to the Northvolt factory under construction in Heide, northern Germany, is still unclear. According to German TV station NDR, construction work is currently underway, but it is more about infrastructure measures or civil engineering work for laying power lines.
Formally, the German Northvolt company is independent of Northvolt in Sweden, and, according to a Northvolt Germany spokesperson, the processes in Sweden should have no impact on the planned site in Heide. However, it must be assumed that the project would only be viable with a new investor.
As 600 million euros of taxpayers’ money has already been invested in the Northvolt project in Heide, the issue is also politically explosive. The German Federal Audit Office is now investigating the German aid for Northvolt, and a committee of inquiry may be convened in the state parliament of Schleswig-Holstein.
Adding to the speculation, the German news magazine Der Spiegel reported that one of Northvolt’s German subsidiaries, Northvolt Germany TopCo GmbH, has allegedly initiated restructuring proceedings. “The future of the unfinished plant in Schleswig-Holstein remains uncertain,” the magazine stated. According to the report, the so-called ‘TopCo’ also includes the German project entity Northvolt Drei Project GmbH (formerly Northvolt Germany GmbH).
However, in response to an enquiry from the German news site electrive, Northvolt clarified that none of its German entities are currently insolvent. The supposed restructuring procedure may refer to a StaRUG process—a preventive restructuring framework introduced in Germany in 2021. The framework allows companies facing imminent financial distress to restructure operations without formal insolvency proceedings, bridging the gap between out-of-court settlements and traditional bankruptcy processes.
The move announced in Sweden is said to have no immediate impact on the Heide project. “Work on the project and on the construction site is continuing,” a Northvolt spokesperson told electrive. “All current measures are being implemented in close coordination with KfW. The focus is particularly on value-enhancing infrastructure work.”
That construction in Heide continues without interruption, with a focus on infrastructure development, may also relate to court-appointed administrator Mikael Kubu’s ongoing efforts to secure a partial sale of the Northvolt group. “The search for a buyer is progressing,” Kubu said on Thursday, noting that negotiations are underway for various company assets, if not for the firm as a whole, then possibly for its Arctic Circle plant or the construction site in Germany.
