"We should have stopped earlier": Northvolt co-founder Peter Carlsson on his three big lessons from the collapse

A packed crowd greeted Northvolt’s co-founder Peter Carlsson as he took the stage at Norrsken Impact Week in Barcelona.

The former CEO of the Swedish battery firm has been laying low since the company went into bankruptcy in March, an event that sent shockwaves through the European impact industry.

Now, for the first time since the collapse, he spoke candidly about the mistakes.

Chasing too much demand

Northvolt has faced heavy criticism for trying to do too much at once. Instead of focusing on scaling a reliable production line at its core plant in Skellefteå, northern Sweden, the company began building factories in both Germany and Canada.

On stage with Norrsken VC’s general partner Tove Larsson, Carlsson reflected on that decision. He said the idea was to expand while making sure they still had sufficient management in Skellefteå. But customer demand shifted the balance:

"We were developing really good products, the customers really appreciated them and wanted to bring more orders — and that is super hard to say no to,” Carlsson said.

The team believed they could secure 15–20% of the European market. Carlsson admitted he knew the expansion would stretch fundraising — and that, in retrospect, they should have stopped earlier.

"As an entrepreneur, you're jumping from bottleneck to bottleneck and you're taking certain bets all the time. Bets that you think will resolve a certain bottleneck in a certain time – and then you kind of allow other processes to continue."

Carlsson also revealed that only a couple of months after Northvolt ran out of liquidity, the first lines hit output numbers that Carlsson described as a "passport to continue."

"It was a timing mistake and it cost us dearly, in combination with a number of other factors outside."

The cap table trap

Capital intensity also created headaches with big, strategic investors like truck manufacturer Scania and car manufacturer Audi.

"In basically every capital round, we had our common stock, then we created a pref share, and then another pref share above that. You get this stack where, if everything goes as planned — which a startup journey never does — it might collapse into an IPO or similar," Carlsson explained.

But when things don’t go to plan, and you need a down round or to replace early investors, "that capital stack becomes one of your biggest enemies". Changing it required 100% shareholder approval which was "almost impossible”.

“That was one of the reasons why we had to go into Chapter 11, to address this in a controlled manner,” Carlsson said about the decision to file for the process that permits reorganisation under the bankruptcy laws of the U.S.

Wrong funding mix

Carlsson also reflected on the "project financing" model Northvolt used — a mix of equity and public money, originally designed for stable industries like infrastructure and oil. He argued it didn’t suit a company building new products.

“When you're building something new, you will have to change suppliers or your product mix. And every time you do that, you need to ask for the approval of your financing community, which can be 15 banks."

That slows you down rather than letting you make the right decisions, he said.

“I do think there is a need for project financing 2.0."