Novo Energy, the battery company formed by Volvo Cars, announced it will cut 50% of its staff as part of a cost-reduction strategy, after reassessing its operations in light of Northvolt’s recent bankruptcy.
The joint venture was launched in 2021 to build a battery factory in Gothenburg, on Sweden’s west coast.
In January, it had already implemented a first round of reductions, cutting 30% of its workforce. A spokesperson told Reuters the new round involves an additional 150 layoffs.
“Despite our best efforts to secure our business and an extensive ongoing search for a suitable new technology partner, the current economic challenges and market conditions have made it impossible to maintain our operations at the current scale,” said CEO Adrian Clarke in a statement.
Novo Energy stated its long-term goal remains to produce batteries with a new technology partner in the Gothenburg region. Volvo Cars confirmed it shares this objective, but declined to provide further details.
In the meantime, Novo will maintain limited operations to finalize the first construction phase and explore future scenarios that may enable a full-scale restart.
In February, Volvo Cars agreed to acquire Northvolt’s 50% stake in Novo Energy for a symbolic sum, a transaction still pending regulatory approval. If finalized, it would give Volvo full ownership of the venture.
Northvolt, once considered a leading European battery hope, filed for bankruptcy in March.
Volvo Cars is also facing financial challenges. During its quarterly earnings presentation in April, its CFO stated the company does not anticipate major investments in the near term.
Although the factory’s construction is nearly complete, no battery production equipment has been installed. In April, Volvo Cars’ new CEO Håkan Samuelsson reiterated the need for a technology partner and indicated the facility may be shared with other Geely-owned brands.
