Is Europe’s biggest battery maker about to run out of juice?

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Subscribe to enjoy similar stories. Europe’s great hope for battery independence is fighting for survival after the company said it was cutting 1,600 jobs and curtailing expansion plans. Northvolt was the darling of the European cleantech industry, attracting billions in funding from the world’s biggest automakers, banks and governments.

Today, as at least one investor questions its relationship with the company, its future seems bleak. For policymakers in Brussels, the Swedish company’s success was seen as key for energy security. Being able to develop a European source of batteries would enable the EU to keep its EV ambitions alive without relying on Chinese supplies, as carmakers looked to switch away from traditional combustion engines.

The troubles at Northvolt reflect a worsening market for battery makers in Europe. Slowing demand, high costs and technical difficulties in the face of overwhelming Chinese manufacturing expansion in recent years has meant that producing batteries profitably and at scale has so far proven an insurmountable challenge for Western companies. Launched in 2015 by former Tesla executives, Northvolt initially opened with a plant in northern Sweden to build state-of-the-art EV batteries using clean energy.

The company attracted billions of dollars in investment, largely through debt. By the start of this year, it had secured some $15 billion worth of funds. Automaker Volkswagen owns 23% of the company, with Wall Street giant Goldman Sachs and carmaker BMW also investing in the company.