Battery cell maker Northvolt has filed for bankruptcy in Sweden, the company said on Wednesday, marking one of the country's largest corporate failures and effectively ending Europe's best hope of developing a rival to challenge China.

Northvolt’s fortunes took a more decisive turn when BMW canceled a $2 billion contract in June 2024. The battery manufacturer had been unable to deliver on time. To conserve cash, it laid off 1,600 employees and sold the assets of its Cuberg division, a Bay Area solid-state battery startup it acquired in 2021.

Northvolt has declared bankruptcy in Sweden, but says its North American operations are solvent. The company is building a large battery factory on Montreal's South Shore.