Beleaguered Swedish electric car battery maker Northvolt said Monday it would cut its workforce as it scales back operations to focus on its main gigafactory in Sweden.
The announcement comes as sales of electric cars are slumping in Europe and the continent lags far behind China in the production of batteries.
Northvolt said it was putting a facility that makes key battery materials at its main Swedish site in Skelleftea “into care and maintenance until further notice”.
The move comes on the heels of Northvolt’s recent announcement that it was scrapping plans to build a facility to produce cathode active material in Borlange, Sweden.
“The cost-saving mechanisms necessary for Northvolt to meet its core objective of focussing on large-scale cell manufacturing will regrettably include some difficult decisions on the size of our workforce to match the needs of a reduced scale of operations,” the company said in a statement.
It did not say how many jobs would be cut.
Northvolt had 5,860 employees at the end of 2023.
Northvolt said the macroeconomic environment was “challenging”, and chief executive Peter Carlsson cited a need to “improve our financial stability and strengthen our operational performance.”
Carlsson stressed that despite the setback, “there remains no question that the global transition towards electrification -— and the long-term outlook for cell manufacturers, including Northvolt — is strong.”
The company said it remained committed to its large-scale cell manufacturing at its sites in Gothenburg, Sweden, Heide, Germany, and Montreal, Canada.
However, “potential revisions to the timelines of these projects will be confirmed during the fall, along with any further necessary cost-saving actions.”
Europe accounts for just three percent of global battery cell production — which China dominates — but it is aiming to catch up and has set its sights on 25 percent of the market by the end of the decade.