After Northvolt's collapse: national action needed to protect production
The news of battery manufacturer Northvolt’s bankruptcy hit Sweden hard, but maybe hardest of all it hit the northern city of Skellefteå – the city where its Gigafactory is located.
Skellefteå municipality stresses that now it is more crucial than ever that national actors take action urgently to keep talent and battery production in Sweden, securing new owners quickly, and maintain production.
“This is a hard day for Skellefteå. After today’s announcement my thoughts are first and foremost with the people who are affected, directly or indirectly. My thoughts are of course also on what a tremendous loss it would be on a local, national and European level if we lose the critical talent that is amassed here. Because it’s important to underscore that what affects Skellefteå in the short run affects Sweden and Europe a lot harder. In the end, it’s about Europe’s competitiveness,” says Lorents Burman (Socialdemocrats), chairman of the municipal board, in a press release.
Burman continues to say that in this situation, the municipality expects the government and national actors to increase their commitment to ensure talent retention and European battery production.
Northvolt’s bankruptcy impacts Skellefteå, affecting local businesses, trade, and the municipality. However, the full extent remains uncertain. Skellefteå municipality has a crisis organisation that is now activated. The main focus for the organisation is to coordinate the work within the municipality and with other actors, and to ensure a current overall view of the situation.
“Today’s announcement is very sad, and we know it will have a negative effect on our municipality in the short run,” says Kristina Sundin Jonsson, municipal manager. “What’s important now is that new owners can be in place as soon as possible and that production can be upheld during that time. We all need to gather strength on a local, regional and national level.”
As the bankruptcy became official, Northvolt stated that it has experienced a series of compounding challenges in recent months, something that had led to an erosion of its financial position. Rising capital costs, geopolitical tension, supply chain disruptions, and a shift in market demand proved to be too much for the struggling Swedish battery manufacturer.
Northvolt has, for quite some time, struggled to ramp production at its main factory “Northvolt Ett” in Skellefteå.
The filings involve Northvolt AB, Northvolt Ett AB, Northvolt Labs AB, Northvolt Revolt AB, and Northvolt Systems AB in Sweden. Northvolt Germany and Northvolt North America are not affected.
Northvolt was established back in 2016 in Stockholm, Sweden. Approximately 5,000 people work at Northvolt, most of them at the company’s operations in Skellefteå. The company also has employees in Västerås and Stockholm.