Northvolt's financial collapse deals a blow to Europe's plan to set up its own battery industry to power electric cars, stirring a debate about whether it needs to do more to attract investment as startups struggle to catch up with Chinese rivals.

The CEO of Northvolt, Peter Carlsson, today resigned amongst ongoing fallout from the Swedish EV battery maker’s U.S. Chapter 11 bankruptcy filing.

Swedish electric vehicle (EV) battery developer and manufacturer Northvolt has collapsed into administration, with at least $1bn of investment needed for a rescue deal.

Northvolt, a Swedish maker of lithium-ion batteries that once was valued by venture capitalists at nearly $12 billion, has filed for bankruptcy. Why it matters This is a massive blow to Europe's EV manufacturing goals,

Northvolt, the Swedish maker of battery cells for electric vehicles, said on Thursday it has filed for Chapter 11 bankruptcy protection in the U.S., dealing a blow to Europe's hopes that its most developed battery player would reduce Western car makers' reliance on Chinese rivals.

Northvolt transformed in a matter of months from Europe's best shot at a homegrown electric-vehicle battery champion to a struggling company.

STORY: Northvolt’s financial collapse could spell the end of Europe’s ambitions to set up its own battery industry to power electric cars. It’s sparked debate over whether the continent needs to do more to attract investment,

This move is part of a strategic effort to restructure debt, scale operations and secure a sustainable foundation for continued operations.