By restructuring the business, Northvolt hopes to raise a total of USD245m in new financing, including USD145m in cash collateral and USD100m of debtor-in-possession finance from an existing customer.

Northvolt says it must reduce its total workforce by 20% and its Swedish workforce in particular by 25% to stay afloat.

The slower-than-expected transition to electric vehicles is one of the main factors behind the decision to restructure the business, though Northvolt’s CEO and co-founder, Peter Carlsson, said, “there remains no question that the global transition towards electrification — and the long-term outlook for cell manufacturers, including Northvolt — is strong”.

The 60 GWh gigafactory, called ‘Northvolt Drei’, is being built in the town of Heide in Schleswig-Holstein.

The money will serve two purposes: it will expand the production of cathode materials and battery cells in the gigafactory, and it will expand the capabilities of the adjacent recycling plant.

The first construction phase of 'Northvolt Six' will begin at the end of this year, with a target of a 30-GWh annual capacity when completed in 2026.

The battery assembly launch will allow Scania to commence serial production of heavy-duty electric vehicles at Södertälje.

Following validation tests, Scania and Northvolt confirmed that the cells have the capacity to propel trucks up to 1.5 million kilometres over their lifetime.