Northvolt, the Swedish battery cell manufacturer, is reassessing its ambitious expansion plans amidst challenges at its production facility in Skellefteå, Sweden, according to recent statements from company officials.
“We were a little too aggressive with our expansion plan, and we are now reviewing this,” said Peter Carlsson, Co-founder and CEO of Northvolt, in an interview with Swedish business newspaper Dagens Industri.
The company’s production in Skellefteå has faced significant hurdles, including high production waste leading to substantial costs and lower-than-expected output. This situation recently led major shareholder BMW to cancel a substantial order worth billions.
“BMW would need the prismatic cells from Skellefteå for current model series such as the iX, i4 or i5 – but Northvolt is unable to deliver the agreed quantities,” reported sources familiar with the matter.
Despite these challenges, Northvolt remains committed to its factory under construction in Saint-Basile-le-Grand, Canada, emphasizing its role in Quebec’s energy transition.
“Our commitment and intentions are unchanged: to play a central role in Quebec’s energy transition by manufacturing the greenest batteries in the world,” a Northvolt spokesperson affirmed.
Regarding the factory in Heide, Germany, Northvolt is also committed to expansion, although the timetable for production ramp-up is under review. Negotiations are underway to potentially supply BMW with cylindrical cells from Heide in the future.
“A large order from a well-known customer and shareholder is on the cards,” noted the spokesperson, hinting at future economic implications for the German facility.
Northvolt, which aims for a significant market share in Europe by the end of the decade, faces intensified competition from cheaper Asian battery cells. The company’s strategic adjustments aim to ensure sustainable growth and operational efficiency amidst these challenges.
In a recent development, Chairman Jim Hagemann Snabe has stepped down from his position due to health reasons, marking a leadership transition during this critical phase for Northvolt.
“We see the need to adjust our plans to ensure that we execute each phase well,” Carlsson remarked, highlighting the company’s focus on strategic alignment and operational excellence.
