Novo Energy, the battery production subsidiary of Volvo Cars, is reducing its workforce by half as part of a restructuring process triggered by its separation from former joint venture partner Northvolt, which is now insolvent. The decision affects around 150 jobs and underscores the challenges the company faces in its transition toward independent battery manufacturing.
The job cuts come as Novo Energy navigates a critical phase in its development. Originally founded in 2022 as a joint venture between Volvo Cars and Northvolt, the companyās name reflects the initials of its founding partners. Following Northvoltās financial difficulties, Volvo Cars assumed full ownership earlier this year, inheriting a business that had relied heavily on its partnerās technical know-how.
āDespite our efforts to stabilise the business and the extensive search for a new technology partner, the current economic challenges and market conditions do not allow us to continue our business at the current level,ā Novo Energy CEO Adrian Clarke said in a statement.
Novo Energy remains committed to its long-term ambition of producing battery cells at a facility under construction in Gothenburg. According to the company, operations will continue on a limited scale as it completes the first phase of construction and assesses future options for scaling up. The firm has not disclosed any progress in securing a new partner.
The plant was initially expected to produce up to 50 gigawatt-hours (GWh) of battery capacity annually, supplying Volvoās European production sites in Gothenburg and Ghent, and potentially serving other brands within Chinaās Geely group. Production had been slated to begin in 2026, but the viability of that timeline remains uncertain in the absence of a new technology provider.