Northvolt’s Quebec plant, backed by $2.4B in government funding, will proceed despite bankruptcy.
Chapter 11 filing restructures Swedish operations, leaving the Canadian subsidiary unaffected.
Financial setbacks include a cancelled BMW contract and a $1B loss in 2023.
Swedish EV battery maker Northvolt AB has filed for Chapter 11 bankruptcy in the U.S., citing financial challenges and a weakening EV market. However, the company confirmed its $7-billion Northvolt Six plant, planned near Montreal, Quebec, will not be impacted.
The Chapter 11 filing, made in the Southern District of Texas, will allow Northvolt to restructure its debt while maintaining operations at its main Swedish facility. Northvolt stated that its Canadian subsidiary, which oversees the Quebec plant, is separately financed and unaffected. The Montreal-area project, supported by $2.4 billion in funding from the Quebec and Canadian governments, is set to produce EV battery cells and cathode active material.
“Northvolt Six is an essential component of the company’s future, and we remain fully committed to seeing it through,” said Paolo Cerruti, CEO of Northvolt North America. He added that the site’s construction is progressing “diligently and prudently” despite the parent company’s restructuring.
In recent months, Northvolt has faced mounting financial pressures. A cancelled €2 billion BMW battery contract, a failed $5 billion loan agreement, and a $1 billion loss in 2023 contributed to its cash crunch. In response, the company laid off 20% of its workforce, halted expansion plans in Sweden, and entered intense rescue talks with stakeholders, which ultimately fell through.
The U.S. bankruptcy process has provided Northvolt with $245 million in interim financing, including $100 million from Scania CV AB, a subsidiary of Volkswagen AG. While its Swedish operations restructure, Northvolt’s Canadian and German subsidiaries continue to do business as usual.
The Quebec plant remains a key part of Northvolt’s expansion strategy in North America. However, concerns about the company’s solvency have raised questions about the project’s future. Cerruti has reassured stakeholders that Northvolt remains committed to Quebec and will not request additional public funds.
Northvolt, which has raised $10 billion since its founding, is seeking $900 million in new funding to secure its long-term stability.
