Northvolt refocuses scope of activities and cuts jobs

As Northvolt writes in an official announcement, management is in the process of taking “some tough actions […] to improve our financial stability and strengthen our operational performance.” Specifically, Northvolt intends to divest business units or pause activities that are not part of its core business to get through the current very difficult situation. Northvolt CEO Peter Carlsson also hinted at redundancies in the press release as a further cost-cutting measure, although he did not specify the extent of the job cuts.

Northvolt already announced a review of its expansion plans at the beginning of July. Northvolt has been manufacturing battery cells in Skellefteå since the end of 2022. But even after a year and a half, production waste is too high, which not only causes enormous costs but also keeps the production volume of cells ready for delivery far below plan. That resulted in Northvolt shareholder BMW recently cancelling an order worth billions. And, of course, the declining demand for EVs is also indirectly affecting Northvolt.

The Swedish battery cell manufacturer is now making its first major course corrections in its current business in order to consolidate. Firstly, the production of cathode material at the Swedish headquarters in Skelleftea will be suspended until further notice, but cell production at the site will continue. Secondly, plans for a cathode factory in Borlänge, Sweden, have been cancelled. The site is to be sold. And thirdly, Northvolt is also looking for an investor for its factory for battery storage systems in Gdansk, Poland.

Northvolt’s planned cell factories in Germany and Canada will not initially be affected by the change in strategy. However, according to German newspaper Handelsblatt, the expansion of the factories in both countries could take place later than planned. According to the Quebec provincial government, the construction of the Canadian battery cell factory could take up to 18 months longer.

Speculation currently ranges from a postponement of the planned plant construction to a general withdrawal regarding the Northvolt project in Heide/Schleswig-Holstein. Following the loss of the BMW order, Carlsson admitted that the company had been too aggressive in its international expansion and that the plans for further plants were, therefore, being reassessed. “We were a little too aggressive with our expansion plan, and we are now reviewing this,” Carlsson told Swedish media in July.

According to Northvolt, a further update on the strategy is planned for autumn. There should then also be official news about Heide. The ground-breaking ceremony took place in March 2024. Commissioning is currently scheduled for 2028.

Meanwhile, Northvolt is not the first battery cell manufacturer to adjust its plans. In June, the Automotive Cells Company (ACC) joint venture between Stellantis, Mercedes-Benz and TotalEnergies announced that it was pausing construction work on its battery cell plants in Kaiserslautern, Germany, and Termoli, Italy, in order to switch to a different cell chemistry. Also, in early summer, the Chinese battery specialist SVOLT announced that it would not be realising its plant in Lauchhammer, Germany, which was announced in September 2022. At the same time, the construction of the SVOLT factory in the German state of Saarland continues to be delayed.

Another example is Ford: plans for a Turkish battery cell plant under the direction of LG Energy Solution and Koç – a shareholder in the Ford Otosan joint venture alongside Ford – have been on hold for some time. That comes as Ford announced a cost-cutting programme in response to billions in losses at Ford’s Model e electric division and weakening demand.

handelsblatt.com (in German), northvolt.com