Swedish battery maker Northvolt will lay off around 1,600 employees, nearly 20% of its global workforce, in response to weaker-than-expected growth in electric vehicle (EV) demand.
The company, once seen as a frontrunner in Europeâs bid to develop its own battery manufacturing industry, is now scaling back several initiatives due to commercial and operational challenges.
The layoffs coincide with Northvoltâs decision to suspend a significant expansion of its Northvolt Ett factory in SkellefteĂ„, northern Sweden.
Originally intended to increase production capacity by 30 gigawatt-hours (GWh), the expansion has been put on hold as the company shifts its focus to ramping up existing capacity at the plant.
Despite strong backing from automakers like Volkswagen, Northvolt has been hit by slower-than-expected growth in the EV market. Competition from Chinese manufacturers, which control 85% of global battery cell production, has further strained the companyâs plans. Northvolt is now prioritizing meeting its current obligations to automotive clients over new projects.
In addition to the workforce reduction, Northvolt has suspended production of cathode active materials at its Swedish plant and delayed other projects in Germany, Canada, and southern Sweden.
The Swedish government has acknowledged the importance of companies involved in green technologies but has ruled out taking any financial stake in Northvolt, underscoring the broader challenges facing the European EV battery industry.
Source: Reuters
