Volvo’s battery subsidiary to fire 150 people

Novo Energy, the battery subsidiary of Swedish car manufacturer Volvo Cars, is cutting every second job. This is a reaction to the company's reorganisation following its separation from the now-insolvent battery manufacturer Northvolt. However, the Swedish company is sticking to its goal of producing its own batteries in Gothenburg.

According to a spokesperson for Novo Energy, the reduction of every second position involves a total of around 150 jobs. The company is currently in a kind of transition phase, but this could also develop into a critical situation: Volvo Cars founded Novo Energy in 2022 together with Northvolt as a joint venture – Novo stands for the respective initials of the two partners. In the wake of Northvolt’s financial difficulties, Volvo Cars took over Novo Energy completely.

The problem: without Northvolt’s expertise in cell production, Novo Energy is dependent on a new partner, as Novo Energy itself never built up these competences, as Northvolt technologies were to be used here. “Despite 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,” explained Novo Energy CEO Adrian Clarke.

Novo Energy remains committed to the long-term goal of manufacturing batteries together with a new technology partner at the plant under construction in Gothenburg, according to a statement from the company. ‘Novo Energy will continue operations on a limited scale while the initial construction phase is being finalised and possible future scenarios for a resumption of large-scale activities are being explored,’ the company said.

Novo Energy had already introduced initial cost-cutting measures in January, when the takeover was finalised after months of negotiations. However, no new cell partner has yet been announced. The company is not providing any information on the stage of the search, but the reduction of every second position does not indicate that a new partnership is imminent and that operations can be restarted shortly.

Novo Energy announced a production of up to 50 GWh to produce battery cells for the European Volvo plants in Torslanda (a district of Gothenburg) and Ghent in Belgium, but potentially also for other Geely brands. Production was originally scheduled to start in 2026. This timetable was already considered questionable at the time of the separation from Northvolt.

novoenergy.se, reuters.com