Northvolt CEO resigns as Europe’s big hope for a battery champion files for bankruptcy

The chief executive of Northvolt stepped down on Friday, shortly after the Swedish battery maker filed for Chapter 11 bankruptcy protection in the U.S.

Peter Carlsson, who co-founded Northvolt and led the firm since its inception in 2016, will step aside to take on a role as senior advisor, the company said. He remains a member of Northvolt's board.

On Thursday, the company sought bankruptcy protection in the U.S. to allow it to restructure its debt, scale back its business and secure a sustainable foundation for its continued operation.

The move represented a major setback to Europe's electrification ambitions.

Once one of Europe's most valuable privately held tech firms, Northvolt said it would continue functioning as normal during the restructuring process, which is expected to finalize in the first quarter of next year.

"Today marks a significant new phase for Northvolt as well as for me personally," Northvolt's Carlsson said in a statement.

"The Chapter 11 filing allows a period during which the company can be reorganized, ramp up operations while honoring 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," he added.

Northvolt said Thursday that the reorganization of the company would help it access approximately $245 million in new financing, totaling around $145 million in cash and $100 million debtor-in-possession financing — a type of loan that is provided to companies in financial distress.

Northvolt Ett, the company's flagship battery gigafactory in Skellefteå in north Sweden, will remain operational, the business said.

It added that the restructuring process will ultimately help Northvolt's long-term