Novo Energy, the battery joint venture founded by Volvo Cars and the now-bankrupt Northvolt, has announced plans to reduce its workforce by 50 percent as it seeks to cut costs and adapt to shifting market conditions. The move comes after extensive efforts to secure a new technology partner failed to yield results, following Northvolt’s bankruptcy earlier this year.
“Despite our best efforts to secure our business and an extensive ongoing search for a suitable new technology partner, the current economic challenges and market conditions have made it impossible to maintain our operations at the current scale,” Novo Energy CEO Adrian Clarke said in a statement on May 5.
Novo Energy was established in 2021 with the goal of building a large-scale battery factory in Gothenburg, on Sweden’s west coast. Cost-cutting measures began in January, when the company dismissed 30 percent of its staff. The latest announcement includes an additional 150 jobs to be eliminated, cutting the workforce in half. A Novo spokesperson confirmed the details to Reuters.
Despite the setbacks, Novo Energy maintains that its main long-term objective remains to produce batteries with a new technology partner in the Gothenburg region. A spokesperson for Volvo Cars confirmed that the automaker shares this objective, but declined to provide more specifics about the company’s future plans.
The company said it will continue limited operations while it completes the first phase of factory construction. Novo will also continue to explore potential future scenarios that could allow it to resume full-scale operations.
Earlier this year, Volvo Cars agreed to buy Northvolt’s 50 percent stake in Novo for a nominal sum, a transaction still awaiting final approval. If completed, this would give Volvo full ownership of the battery company.
Northvolt, once hailed as Europe’s most promising battery manufacturer, filed for bankruptcy in March, adding further uncertainty to the sector.
Volvo Cars has also been facing financial headwinds. During the company’s recent quarterly earnings call, its CFO said that no major investments were expected in the near future. According to Volvo’s new CEO Hakan Samuelsson, while construction of the Gothenburg battery plant is nearly finished, no battery manufacturing equipment has been installed yet. Samuelsson also stressed the ongoing need for a technology partner, adding that it may be necessary to share the plant with other brands owned by Volvo’s parent company, Geely.
