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.

This move comes amid geopolitical instability, rising capital costs, supply chain disruptions, and shifts in market demand.