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.

Northvolt’s ambition was to challenge the dominance of Asian battery makers, such as CATL and BYD in China. The company launched in 2016 with the idea of tapping cheap renewable energy to build lithium-ion batteries for electric vehicles (EVs). It promised 90% less CO 2 emissions compared to cells made using coal power by 2030.

The company’s woes are symptomatic of a wider malaise among companies that make batteries for electric vehicles.

It's about who controls the battery supply chain, and thus one of the most crucial energy technologies of tomorrow. As is the case in the U.S., Europe is trying to break free of China's iron grip on the battery space.

Northvolt’s Skellefteå site was the cornerstone of Europe’s battery strategy. The company is now reportedly on the brink of bankruptcy - Northvolt/Handout via REUTERS Europe’s battery strategy is disintegrating,

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,

Beleaguered Swedish battery manufacturer Northvolt announced on Thursday that it was filing for bankruptcy in the U.S., striking a blow to Europe’s ambitions for homegrown lithium-ion batteries.

Sweden’s ambitions of having a strong electric vehicle (EV) battery industry are overshadowed by the financial collapse of battery maker Northvolt. Last month, Northvolt summarily rejected the headhunter’s scheme and filed for Chapter 11 bankruptcy protection in the United States,