Northvolt, the Swedish electric vehicle battery startup, has filed for bankruptcy in Sweden, marking the end of a company once seen as Europe’s best hope of challenging the dominant Asian battery industry.

The company said in a statement it had been unable to “secure the necessary financial conditions to continue in its current form” in Sweden.

After the bankruptcy filing, a court-appointed trustee will oversee the sale of Northvolt’s business and assets while settling its outstanding debts.

The company’s 5,000 employees now face an uncertain future, and Northvolt said it would work closely with authorities and trade unions to give workers support and information.

The Swedish bankruptcy filing follows months of crisis at the company, as cash ran dry and it filed for Chapter 11 bankruptcy protection in the US in November, followed shortly after by the departure of its chief executive, Peter Carlsson. He said at the time that Northvolt needed to raise between $1bn (£800m) and $1.2bn to restore its business.

The company, whose slogan was “make oil history”, received more than $10bn in equity, debt and public financing since it was founded in 2016, and it counted the carmaker Volkswagen and the investment bank Goldman Sachs as its biggest owners.

“This is an incredibly difficult day for everyone at Northvolt,” said Tom Johnstone, Northvolt’s interim chair.

“We set out to build something groundbreaking – to drive real change in the battery, EV [electric vehicle] and wider European industry and accelerate the transition to a green and sustainable future.”

Northvolt was widely regarded as a leading player in European efforts to build an electric vehicle battery industry.

The company built a factory in northern Sweden, where it was hoping to use green energy to produce hundreds of thousands of EV batteries each year, but it ran into difficulties getting the facility up and running properly. Last year it also suspended the expansion of the plant, Europe’s first homegrown battery gigafactory.

Northvolt said on Wednesday it had been forced to file for bankruptcy in Sweden after “an exhaustive effort to explore all available means to secure a viable financial and operational future for the company”.

It blamed “a series of compounding challenges” in recent months that had hit its finances, “including rising capital costs, geopolitical instability, subsequent supply chain disruptions, and shifts in market demand”.

Northvolt added that it had faced “significant internal challenges” during the ramp-up of battery production in what it called a “highly complex industry”. The startup had previously faced criticism for trying to build several factories at the same time in Sweden, Germany and the US.

In its attempt to save the company last year, Northvolt had already sought to cut costs and announced 1,600 job cuts, and had planned to complete a restructuring of the business by the end of March.