German Economy Minister Robert Habeck expressed cautious optimism about the future of financially troubled Swedish electric vehicle battery manufacturer Northvolt, which had planned to build a major new factory in northern Germany.
Northvolt filed for bankruptcy on Thursday in the United states.
"Of course Northvolt has problems," Habeck told dpa.
He said the primary issue for Northvolt is currently that not enough batteries are being produced at the company's plant in Sweden.
"But these are technically solvable problems," he said.
Habeck noted that many companies have gone through the restructuring process via bankruptcy proceedings in US courts, and some have emerged stronger.
The minister said he is aware of investor interest in Northvolt and hopes that a reorganization will succeed: "We need our own European battery production."
With regard to the planned Northvolt factory near the German town of Heide, Habeck said that things would continue there for the time being.
"If the parent company reorganizes itself and the investors come back in, then the prospects are clear and secure," he said.
However, he said the problems at Northvolt must be taken seriously and described himself as only "cautiously optimistic."
Northvolt had emphasized that the German subsidiary would be financed independently of the parent company and was not part of the Chapter 11 bankruptcy proceedings.
The construction project at Heide remains a strategic cornerstone for the company, Northvolt said.
The bankruptcy proceedings are intended to protect the company from creditor claims while it struggles to chart its future as an independent company, and can open up new sources of financing, according to Northvolt.
About $100 million in financing is being supplied to Northvolt by a battery customer as part of bridge financing for the firm.
In addition, Northvolt will receive access to around $145 million from lenders in financing known as cash collateral.
Northvolt had been regarded as the great hope of the European automotive industry in terms of battery production for electric cars.
The company's largest shareholder is the German car manufacturer Volkswagen, and another German automaker, BMW, is also among the part owners of the firm. So too is the US investment bank Goldman Sachs.