- Northvolt has 6,500 employees and targets 25% of Europe’s battery market by 2030.
- It faced a €2 billion order cancellation from BMW due to production delays.
- The company plans to raise 7.5 billion kronor amid financial issues.
- Swedish Prime Minister ruled out government ownership in Northvolt.
Northvolt, the Swedish battery manufacturer, has announced plans to cut 1,600 jobs, accounting for 25% of its workforce. This decision comes amid a slump in electric car sales across Europe and highlights the continent’s struggles to compete with China’s dominance in battery production.
CEO Peter Carlsson emphasized the need for strategic adjustments in response to challenges in the automotive market and the broader industrial landscape. He stated that Northvolt must “focus all energy and investments into our core business” to navigate these headwinds effectively.
In a previous warning issued on September 9, Northvolt indicated that layoffs were forthcoming. Following a strategic review, the company estimates that around 1,000 positions will be eliminated at its primary facility in Skellefteå, where plans for expansion have been put on hold. The expansion project aimed to increase the plant’s capacity to produce 30 GWh annually but will now shift focus to achieving 16 GWh.
Earlier this year, Northvolt expressed optimism about reaching an annual production of over 1 GWh by the end of 2023, a target that remains distant given the facility’s full potential. For context, 1 GWh of battery capacity can power approximately 20,000 average-sized electric cars.
Carlsson noted that successfully ramping up production at the Skellefteå plant, known as Northvolt Ett, is vital for meeting customer demands and ensuring sustainable business operations.
In addition to the cuts at Skellefteå, Northvolt plans to reduce its workforce by 400 positions in Västerås and 200 in Stockholm. The company stated that these reductions are essential to establish a sustainable operational structure and cost base, aiming for a global workforce reduction of about 20%
Cornerstone
Northvolt currently employs 6,500 people, according to its website. The company is seen as a key player in Europe’s efforts to compete with China and the United States in battery cell production, a vital component for lower-emission vehicles. While Europe currently accounts for only 3% of global battery cell production, it aims to capture 25% of the market by the end of the decade.
Despite its ambitions, Northvolt has faced significant challenges, including production delays that caused BMW to cancel a €2 billion ($2.2 billion) order in May. However, Northvolt claims to hold contracts worth $55 billion with major clients like Scania, Volvo, and Volkswagen, which is also its largest shareholder with a 21% stake.
Recent reports from the business daily Dagens Industri indicate that production delays and reduced demand from automotive customers have led to a rapid deterioration in Northvolt’s financial situation, particularly worsening over the summer. In response, the company is reportedly planning a new share issue to raise 7.5 billion kronor.
Additionally, Northvolt has come under scrutiny in Sweden regarding workplace safety. Swedish police are investigating several unexplained deaths of factory workers at its Skellefteå plant.
In mid-September, Swedish Prime Minister Ulf Kristersson confirmed that the government has no plans to take an ownership stake in Northvolt. Since its founding, the company has secured $15 billion in credit and capital to support its operations.
