The clean energy sector has been facing a period of intense volatility, with investors increasingly wary of its unstable trajectory. After a rapid decline in solar stocks, attention has now turned to the electric vehicle (EV) market, which is grappling with dwindling demand and uncertain investment conditions. One of the latest casualties in this turbulent landscape is Wolfspeed, a semiconductor firm once hailed as a frontrunner in the Wolfspeed EV chip market. Once backed by strong investor interest and government subsidies, the company has now filed for bankruptcy, marking a significant downturn in its fortunes and casting a shadow over the EV chip industry at large.
Wolfspeed EV chip Rise and Fall in the EV Chip Arena
Wolfspeed, trading under the ticker WOLF, was once celebrated for its pioneering work in silicon-carbide chips, a technology touted as more efficient and faster than traditional silicon-based solutions. The company’s roadmap appeared promising: build large-scale semiconductor fabrication facilities in the U.S., control its supply chain, and expand into adjacent markets such as gallium-nitride RF chips aimed at data centers and 5G networks. With support from private investors and the U.S. Wolfspeed electric vehicle(EV) chip was widely seen as a cornerstone of the next generation of clean-tech infrastructure.
The company also looked to Europe for expansion, particularly targeting Germany’s auto manufacturing hub in Saarland. A $3 billion plant was announced, backed by anticipated subsidies from both the U.S. and EU governments. However, by mid-2024, global chip demand had begun to cool. Doubts emerged over the feasibility of the Saarland project, especially after ZF, an automotive parts giant and Wolfspeed’s joint venture partner, pulled out. While the company managed to secure a $1.5 billion funding package—half from the CHIPS Act and half from Apollo investors—it wasn’t enough to stabilize its spiraling trajectory.
Bankruptcy Filing Aims to Slash Debt and Reset Operations
Wolfspeed’s precarious financial state came to a head in May 2025 when the company issued a going-concern warning, citing $6.5 billion in debt and a rapidly depleting cash runway. The final blow came as Wolfspeed filed for bankruptcy in early June, initiating a comprehensive restructuring plan intended to reduce its debt burden by 70%, or approximately $4.6 billion. The company also aims to lower its annual interest payments by 60% as part of the restructuring.
To support this transition, Wolfspeed has secured $275 million in new financing, including a key contribution from Renesas’ U.S. division. CEO Robert Feurle described the bankruptcy move as a “strategic step” necessary to strengthen the company’s financial position and prepare it for a potential recovery. Wolfspeed claims to still hold $1.3 billion in cash, which should help address short-term liquidity issues.
Nonetheless, the market’s response has been brutal. Wolfspeed EV chip stock has plummeted over 70% in the last month alone, trading at a mere 63 cents per share, down more than 30% in just the past week. As the company works toward an exit from bankruptcy, targeted for Q3 2025, the broader EV chip industry watches closely, wary of further tremors in an already fragile market.
