Northvolt, a major player in Europe’s automotive battery industry, has announced plans to cut 1,600 jobs at its base in Sweden. This decision comes as the demand for electric vehicles (EV) remains sluggish and Chinese producers pose stiff competition. The cuts represent approximately 20 percent of Northvolt’s global workforce and were attributed to a challenging macroeconomic climate that necessitated adjustments to the company’s ambitions.
Northvolt CEO Peter Carlsson stated that while the overall momentum for electrification remains strong, it is crucial to take appropriate actions in response to headwinds in the automotive market and wider industrial climate. The company will now focus its energy and investments on its core business.
To adapt to the current circumstances, Northvolt will adjust its near-term ambitions by concentrating on ramping up production at its battery factory in Skelleftea, northern Sweden. Plans for a large expansion of this facility have been suspended. Around 1,000 jobs will be cut at this location, with an additional 400 positions eliminated at Northvolt Labs in Vasteras and another 200 reductions among corporate support staff at the headquarters in Stockholm.
The fate of planned gigafactories in Germany and Canada was not mentioned in Northvolt’s announcement but may be postponed.
This move comes after Northvolt recently announced cost-cutting measures by streamlining its business operations. Originally aiming to offer end-to-end services from material production to recycling, the company has decided to narrow its focus.
Despite being a leading battery manufacturer within the European Union (EU), Northvolt has faced challenges with order delays. BMW canceled a $2 billion order earlier this year due to difficulties with production ramp-up.
The decision by Northvolt reflects a slowdown in EV demand not only within Europe but also globally. A report from consulting firm Ernst & Young (EY) highlighted factors such as high prices, economic uncertainty, and inadequate infrastructure as reasons for this decline. However, EY predicts that these headwinds will be temporary and expects EVs to regain momentum and dominate the automotive market eventually.
