Northvolt chief resigned one day after the battery maker went bankrupt

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Northvolt’s CEO has resigned a day after the European battery giant filed for bankruptcy in the US.

Peter Carlsson accepted responsibility for the fatal collapse during a town hall meeting with employees on Friday morning, the Stockholm-based company said.

Northvolt is the best-funded startup in Europe, having raised more than $15 billion from investors and governments, but only has $30 million in cash left – enough to operate for a week – before filing for bankruptcy under US Chapter 11 regulations that protect the company from creditors.

“A Chapter 11 filing allows a period of time during which the company can reorganize, enhance operations while honoring customer and supplier commitments, and ultimately position the company company in the long term. This is the right time for me to hand over to the next generation of leadership,” said Carlsson.

The former Tesla executive founded Northvolt in 2016 and sees it as Europe’s answer to the growing dominance of Asian companies in battery manufacturing such as China’s CATL and BYD, Panasonic of Japan, LG and Samsung of Korea.

Northvolt has collected more than $50 billion in orders from automobile corporations such as Volkswagen, BMW, Scania and Porsche as well as billions of dollars in capital from similar corporations and from financial investors such as Goldman Sachs and BlackRock. .

But it said late on Thursday it was filing for Chapter 11 bankruptcy in the US with $5.8 billion in debt, to access $145 million in cash and $100 million in new financing from Scania truck manufacturer. They are currently looking for one or more investors to provide future financing to exit Chapter 11.

Northvolt has struggled to ramp up production at its sole factory in Skellefteå, just below the Arctic Circle in northern Sweden.

Plans to build factories in Germany and Canada remained unaffected by Chapter 11 because they received significant subsidies from their respective governments.

“We are incredibly grateful to Peter for his vision and dedication in building Northvolt from an unprecedented idea into a battery manufacturing champion,” said Tom Johnstone, interim president of Northvolt. of Europe”.

The company will begin a search for a new CEO immediately.

Its current leadership includes Pia Aaltonen-Forsell, chief financial officer; Matthias Arleth, a former VW executive, is now head of the department and will also take on the role of chief operating officer; and Scott Millar, a managing director at Teneo, who became chief restructuring officer.

Carlsson, currently one of Northvolt’s largest shareholders, will remain on the company’s board and as a senior advisor.

Current and former employees told the Financial Times that Northvolt’s collapse was due to a series of problems, from mismanagement and overspending to poor safety standards and overreliance on Chinese machinery. .

Some investors secretly urged Carlsson to resign to take responsibility for Northvolt’s disastrous decline.