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Northvolt’s chief executive has resigned a day after Europe’s big battery hope filed for bankruptcy in the US.
Peter Carlsson took responsibility for the dramatic collapse during a town-hall meeting with employees on Friday morning, the Stockholm-based company said.
Northvolt was Europe’s best-funded start-up, having raised more than $15bn from investors and governments, but was left with just $30mn in cash — enough to operate for a week — before its bankruptcy filing under US Chapter 11 rules that gives it protection from creditors.
“The Chapter 11 filing allows a period during which the company can be reorganised, ramp up operations while honouring customer and supplier commitments, and ultimately position itself for the long term. That makes it a good time for me to hand over to the next generation of leaders,” Carlsson said.
He later told reporters that Northvolt needed about $1bn-$1.2bn to be able to continue as a going concern after Chapter 11.
The former Tesla executive founded Northvolt in 2016 and positioned it as Europe’s answer to the growing dominance of Asian players in battery manufacturing such as China’s CATL and BYD, Japan’s Panasonic and South Korea’s LG and Samsung.
Northvolt gathered more than $50bn in orders from automotive groups such as Volkswagen, BMW, Scania and Porsche as well as billions more in capital from the same groups and from financial investors including Goldman Sachs and BlackRock.
But it said late on Thursday that it was filing for Chapter 11 bankruptcy in the US with $5.8bn in debts, so that it could access $145mn in cash and $100mn in fresh financing from truckmaker Scania. It is now looking for one or more investors to provide it with future financing to exit Chapter 11.
Current and former employees have told the Financial Times that the fall of Northvolt was due to a litany of issues, from mismanagement and overspending to poor safety standards and over-reliance on Chinese machinery.
Several investors had privately urged Carlsson to resign to take responsibility for Northvolt’s dramatic fall from grace.
Speaking to reporters on Friday about what went wrong, Carlsson said: “I should have pulled the brakes earlier on the expansion path to make sure the core engine was moving according to plan.” He also said there had been “gravel in the machinery”.
VW, Northvolt’s biggest current shareholder with a 21 per cent stake, had told the start-up that “they’re not able to continue capitalising us”, Carlsson continued. But he also said that the company had received strong support from Scania, Porsche and Audi, which are all part of the VW group.
Northvolt has struggled to ramp up production at its sole factory in Skellefteå, just below the Arctic Circle in northern Sweden.
Its plans for factories in Germany and Canada remain unaffected by Chapter 11 as they have received significant subsidies from the respective governments.
“We are incredibly thankful to Peter for his vision and dedication to building Northvolt from an unprecedented idea to becoming Europe’s battery manufacturing champion,” said Tom Johnstone, Northvolt’s interim chair.
The company will begin searching for a new chief executive immediately.
Its present leadership consists of Pia Aaltonen-Forsell, chief financial officer; Matthias Arleth, a former VW executive who is now head of cells and who will also take the role of chief operations officer; and Scott Millar, an executive at Teneo who has become chief restructuring officer.
Carlsson, currently one of Northvolt’s largest shareholders, will remain on the company’s board and as a senior adviser.
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