Volvo Cars wants to buy struggling Northvolt out of their joint venture to build a battery factory in Gothenburg in a move underscoring the challenges facing European carmakers and suppliers in the transition to electric vehicles.

The Swedish carmaker, owned by China’s Geely, said on Wednesday that it planned to invoke its redemption rights to take full ownership of Novo Energy from its current 50-50 partner Northvolt as the battery group had not “fulfilled its financing obligations”.

Northvolt, which is fighting to raise a rescue package in the coming days, said it had decided not to contribute more capital to Novo Energy and instead focus its funding on its sole current factory in Skellefte? in northern Sweden, where it has struggled to ramp up production.