Northvolt, a Swedish battery manufacturer, has filed for Chapter 11 bankruptcy in the US, marking a significant setback for Europe's ambitions to develop homegrown lithium-ion batteries. The company, which had raised $14.26 billion in funding, has been struggling financially, burning through $100 million per month.

Northvolt's financial woes are attributed to poor execution rather than softer-than-expected demand for electric vehicles (EVs). The company had laid off 1,600 employees, about 20% of its workforce, in September and unloaded assets from its ill-fated purchase of Bay Area battery startup Cuberg in November. The final blow came when BMW pulled out of a $2 billion contract in June after Northvolt failed to deliver on time.

Despite this setback, Northvolt's bankruptcy may not be the end for the Swedish company. Volkswagen, which owns part of Northvolt, has placed a big bet on EVs and will need millions of cells to meet its goals. Additionally, Europe's push to develop its own battery manufacturing capabilities may lead to a partnership with an Asian rival to help Northvolt get back on its feet.