Northvolt, the Swedish battery maker which is Europe’s best-funded startup, has announced plans to cut jobs and sell some of its businesses.
The company, which carries much of the weight of Europe’s domestic battery hopes on its shoulders, said it will pause its cathode production, selling a site in Sweden dedicated to it. It'll also sell off its energy storage systems factory in Gdansk, Poland.
Northvolt, which announced a strategic review in July after a series of setbacks, said on Monday that it will re-focus efforts on its original gigafactory, Northvolt Ett, in the north of Sweden, to “maintain its position as a leading cell manufacturer in the Western world”.
The strategic review was announced after car maker BMW — a shareholder – cancelled a €2bn contract with the company because of production delays.
Northvolt also saw its net losses quadruple last year, reaching $1.2bn in 2023 up from $285m in 2022. Revenue increased slightly to $128m last year from $107m the year before.
Peter Carlsson, CEO and cofounder of Northvolt, said in a statement: “We are having to take some tough actions for the purpose of securing the foundations of Northvolt’s operations to improve our financial stability and strengthen our operational performance. While conditions at this time are challenging, there remains no question that the global transition towards electrification — and the long-term outlook for cell manufacturers, including Northvolt — is strong.”
What does that mean for Northvolt’s sites?
Northvolt has stated that it “remains committed” to building three new factories, though reports have suggested that their timelines could be pushed back.
They are:
- NOVO, a battery manufacturing plant in Gothenburg, Sweden, which is a joint-venture with Volvo and expected to commence operations in 2025
- Northvolt Drei, a gigafactory in Heide, in northern Germany
- Northvolt Six, a fully integrated battery manufacturing plant under construction in Quebec, Canada
Northvolt said it “is in close dialogue with the key stakeholders involved” and revisions to the timelines of the projects will be confirmed in the fall.
Last week, Quebec’s then Minister of Economy, Innovation and Energy, Pierre Fitzgibbon, told local press that he had heard from Northvolt management that the delay was 12-18 months, pushing battery production from 2025 to 2026 or beyond. He later revised his comments to suggest he was talking more generally about the battery ecosystem.
Northvolt has sold its site in Borlänge, Sweden, which was acquired in 2022 to be turned into a facility for cathode active material production. It has also paused operations at another cathode production facility in Skellefteå, Sweden.
What does this mean for Northvolt employees?
Northvolt, which has 7,000 employees, says “no final decisions have been made on the precise nature of any resizing” and is currently in discussions with its workers’ unions.
Change at the top
In the run up to the strategic review, Northvolt made changes to its leadership.
Alexander Hartmann, who was the company’s CFO for seven years, has switched roles, becoming “chief transformation officer”. He was replaced by Pia Aaltonen-Forsell, formerly CFO at Outokumpu, a sustainable steel company.
Leadership changes are also afoot at Northvolt’s North American operation. James Rutland, Northvolt’s former CFO based in Quebec, left the role in August after nearly seven years at the company. It’s not clear if a replacement has or will be appointed.
Europe’s best-funded startup
Northvolt is Europe’s best-capitalised battery manufacturer — and its best-funded startup, with $15bn raised to date. It was one of the first startups to get institutions like BlackRock, Goldman Sachs and Baillie Gifford to open their wallets and back the next generation of green tech.
It secured a mammoth $5bn in debt in January this year, provided by 23 commercial and public banks, including the European Investment Bank (EIB) and the Nordic Investment Bank (NIB).
