Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Northvolt will cut more than one in five jobs and suspend the expansion of its main gigafactory as Europe’s leading battery maker fights for survival.
The group said on Monday that it would cut 1,600 jobs in Sweden as part of its effort to attract new capital from investors.
The lossmaking group said it had managed to triple its production since the start of the year to 60,000 battery cells a week, but that is still well below an annual level of 1 gigawatt hours of batteries, the level needed to power about 17,000 cars.
Its factory in Skellefteå in northern Sweden has a capacity of 16GWh but Northvolt has struggled to increase production since making its first cell in late 2022.
“While overall momentum for electrification remains strong, we need to make sure that we take the right actions at the right time in response to headwinds in the automotive market, and wider industrial climate,” said chief executive Peter Carlsson.
He added that the group now needed “to focus all energy and investments into our core business”.
Northvolt is Europe’s great hope of competing with the dominant Asian players in the battery industry such as China’s CATL and BYD and Korea’s LG and Samsung.
But despite raising $15bn since its launch — more money than any private European start-up — from the likes of Volkswagen, Goldman Sachs, BMW and Siemens, the Swedish group needs more capital to continue its ramp-up at Skellefteå.
It has struggled in recent months to convince investors to participate in a further capital raise, amid worries about the slowing uptake of electric vehicles on the continent. Sweden’s centre-right government last week ruled out a state-backed rescue of the company.
Northvolt said on Tuesday that it was suspending its plans to add another 30GWh of capacity at Skellefteå. Carlsson told the Financial Times this summer that it would produce only “a handful” of GWh of batteries in 2025 before hoping to reach profitability the following year.
The job cuts will affect 1,000 workers in Skellefteå, 200km below the Arctic Circle, 400 at its research site in Västerås in central Sweden, and 200 at its headquarters in the capital Stockholm. Northvolt has
7,100 workers worldwide, of which 6,400 are in Sweden.
“Success in the ramp-up of production at Northvolt [Skellefteå] is critical for delivering to our customers and enabling sustainable business operations,” Carlson said, adding that while recent production data at the plant indicated the company was on the right path, “the decisions we’re taking today, however tough, are required for Northvolt’s future”.
BMW, one of Northvolt’s first customers and a top-10 shareholder, cancelled a $2bn contract with the battery maker earlier this year, handing it to Samsung instead in frustration at the slow ramp-up.
Northvolt has sought to emphasise its importance to European industry and the automobile sector specifically, arguing that the continent cannot afford to let leadership of such a key component of carmaking be dominated by Asian rivals.
It has hinted that its plans for three future factories — one in Sweden in conjunction with Volvo Cars, and one each in Germany and Canada — could be delayed as it focuses on Skellefteå for now.
