• Electric vehicle battery maker Northvolt is being placed under Chapter 11 bankruptcy protection, it announced Thursday.

• The Swedish company, founded by two former Tesla executives, has struggled amid faltering demand for electric vehicles.

• Peter Carlsson, CEO and co-founder of Northvolt, is expected to resign as part of the bankruptcy process.

Northvolt, the electric vehicle battery company founded by two former Tesla executives, has filed for bankruptcy (chapter 11) protection after struggling to increase production.

The Swedish company announced Thursday that it had voluntarily initiated bankruptcy proceedings in the United States in order to be able to restructure its debt and obtain new investments.

Shortly after the bankruptcy announcement, CEO Peter Carlsson, one of Northvolt’s founders, announced that he would step down as part of the process.

Bankruptcy documents showed Northvolt had about $5.8 billion in debt and only $30 million in available cash, enough to fund its operations for about seven days.

In the bankruptcy documents, Goldman Sachs, JPMorgan and Microsoft were all listed as creditors. It has raised more than $15 billion since its inception in 2016.

Northvolt said it has secured approximately $245 million in additional financing, including $145 million in cash, and a $100 million commitment from a customer to provide a debtor-in-possession loan – a specialized credit line for bankrupt companies.

“This milestone will enable Northvolt to continue its mission of establishing a European industrial base for battery production,” Tom Johnstone, interim president of Northvolt, said in a statement.

“Despite near-term challenges, this action to strengthen our capital structure will enable us to capture continued market demand for vehicle electrification,” he added.

Northvolt plans to continue operations during the bankruptcy proceedings.

Founded by Carlsson and Paolo Cerruti, Northvolt aimed to revolutionize battery manufacturingbut he has struggled in recent months.

The company’s bankruptcy comes after difficulties ramping up battery production at its factory in Skellefteå, Sweden, near the Arctic Circle. In June, BMW pulled out of a $2.1 billion order for battery cells for its electric vehicles, citing delivery delays.

In September, Northvolt said it lay off around 1,600 employees.

European automakers are grappling with weak demand for electric vehicles and growing competition from Chinese rivals.

On Wednesday, Ford said he cut 4,000 jobs in Europe by the end of 2027.

VolkswagenEurope’s largest carmaker, plans for the first time to close factories in Germany and cut tens of thousands of jobs. VW faces faltering demand in Europe and has lost market share in China. local rivals sell cheaper electric and hybrid vehicles.

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