Novo Energy, the Swedish battery factory jointly established by Northvolt and Volvo Cars, has announced a major downsizing, laying off 50% of its workforce. The move follows the bankruptcy of Northvolt, a key partner in the venture, which has thrown the factory’s future into uncertainty.
Founded in 2022 in Gothenburg, Novo Energy was created to boost battery development and production for Volvo’s electric vehicles. The factory was expected to supply batteries for around 500,000 cars annually and employ about 3,000 people once fully operational. However, the collapse of Northvolt derailed those ambitions.
Volvo Cars took full ownership of Novo Energy at the end of January, stepping in to stabilize the venture as Northvolt’s financial troubles intensified. But despite efforts to keep the project going, Novo Energy has now confirmed that around 150 employees will be made redundant in a bid to reduce operational costs.
“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,” said Adrian Clarke, CEO of Novo Energy.
The layoffs come just weeks after Northvolt’s own mass layoff of 2,800 employees. The bankruptcy not only disrupted Novo Energy’s operations but also left the company without the critical technology expertise Northvolt provided.
Christan Jebsen, head of communications at Novo Energy, admitted it has been difficult to replace Northvolt with another technology partner. However, he remains optimistic that the recent cuts will allow the company to sustain itself long enough to secure a new partner.
While Novo Energy is still operational, the significant downsizing marks a major setback for Sweden’s electric vehicle battery ambitions and reflects wider instability in the EV supply chain amid a challenging global economy.
