Swedish battery maker Northvolt filed for bankruptcy last week, threatening both the European electric vehicle (EV) sector and the EU’s budget, with outstanding loans of over €300 million.
The company sought bankruptcy protection under U.S. Chapter 11 procedures, leaving just $30 million (€28.81m) in cash. Northvolt owes significant debts, including $5.84 billion, with €313 million owed to the EU through the European Investment Bank (EIB).
EU Faces Financial Fallout
The EU had supported Northvolt with loans under its strategic investment fund, aimed at promoting green transition technologies. The collapse of Northvolt creates uncertainty for creditors, with the European Commission and EIB now working to mitigate the impact.
If any losses occur, they may fall to the EU budget, which is largely funded by member state contributions. The EU’s 2024 draft budget includes €800 million in reserves for unforeseen needs.