Swedish battery maker Northvolt is considering US bankruptcy protection as a strategy to address its financial challenges, according to a report by Reuters citing business daily Dagens Industri.

The company, once seen as Europe's key electric vehicle battery producer, is now focusing on survival by reducing its operations due to production issues, the loss of a key customer, and difficulties in securing additional funding, undisclosed sources told the publication.

Since its inception in 2016, Northvolt has secured approximately €10bn ($10.57bn) in funding.

In July 2023, the company initiated a comprehensive review of its strategic direction.

Earlier reports indicated stalled discussions between Northvolt and its creditors, shareholders, and at least one customer regarding short-term financing.

However, sources told Reuters that these discussions have resumed, despite recent difficulties.

A Northvolt spokesperson declined to comment on the possibility of Chapter 11 proceedings or other future plans.

The spokesperson of the company told Reuters: "Since the beginning of the strategic review, we have constantly been discussing different options and that hasn't changed throughout the process."

In October 2024, Northvolt announced that one of its subsidiaries, Northvolt Ett Expansion AB, has filed for bankruptcy following a restructuring effort.

This move aimed to cut costs and scale back plans for expanding battery manufacturing capacity. The bankruptcy filing was made at the District Court of Stockholm due to the financial situation of Northvolt Ett Expansion AB.

Last month, reports also emerged that Northvolt is close to securing a financing package exceeding $300m to strengthen its financial stability. The company has engaged in discussions with investors and lenders over recent weeks to arrange short-term funding, three sources with knowledge of the situation told Reuters.