Energy Transition

VW-backed Northvolt plans layoffs and seeks investor for Polish battery systems factory

Battery specialist to focus operations around first Swedish cell gigafactory but so far sticks to expansion plans in Germany and Canada

Northvolt Ett factory in northern Sweden under construction.
Northvolt Ett factory in northern Sweden under construction.Photo: Northvolt
European Editor, Recharge

Volkwagen-backed Northvolt will streamline its operations around its first Swedish battery cell factory at Skellefteå, Sweden, while downsizing its expansion plans and workforce elsewhere to save costs.

The Swedish battery specialist as an initial result of an ongoing strategic review will seek investors and future partners for its Northvolt Dwa factory in Gdansk, Poland, that can capitalise the production of battery systems and packs there.
The company confirmed it will terminate plans for a new plant for cathode active material production in Borlänge, Sweden on the site of an old paper and pulp mill. Northvolt earlier had already said it would integrate its Cuberg subsidiary in the US state of California into its R&D centre Northvolt Labs in Sweden.

“With the strategic review now underway, we are having to take some tough actions for the purpose of securing the foundations of Northvolt’s operations to improve our financial stability and strengthen our operational performance,” CEO Peter Carlsson said.

“While conditions at this time are challenging, there remains no question that the global transition towards electrification — and the long-term outlook for cell manufacturers, including Northvolt — is strong.”

Northvolt was founded in 2016 in Stockholm and quickly became the bearer of hope to make the European car industry less dependent of Chinese or other Asian battery and cell producers.

But the expansion of electric cars in Europe has stalled, and Carlsson earlier this year had already acknowledged to Swedish news daily Dagens Industri that the company “was too aggressive with our expansion plan” that had to be reviewed, while net losses more than tripled to $1.17bn last year.

Another setback came in June, when German carmaker BMW reportedly cancelled a €2bn ($2.2bn) battery cell contract, citing quality issues.

Key customers such as Scania, Volvo Cars and Volkswagen still back the battery manufacturer, which has received more than $50bn in orders.

Northvolt said it will now focus its resources on becoming a leader in sustainable large-scale cell manufacturing by ramping up the first phase of the Northvolt Ett gigafactory in Sweden. But it will place operations at its cathode active material production facility there into care and maintenance until further notice to streamline operating costs.

The company is in talks with unions about a downsizing of its workforce.

“As difficult as this will be, focussing on what is our core business paves the way for us to build a strong long-term foundation for growth that contributes to the Western ambitions to establish a homegrown battery industry,” Carlsson said.

Northvolt so far sticks to plans for more large-scale cell factories in northern Germany (Northvolt Drei), Canada (Northvolt Six) and western Sweden (NOVO).
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Published 10 September 2024, 07:07Updated 10 September 2024, 07:07
EuropeSwedenNorthvoltbattery storageFinance