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.

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.

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

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

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

The chief executive of Northvolt stepped down on Friday, shortly after the Swedish battery maker filed for Chapter 11 bankruptcy protection in the U.S.