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Released October 07, 2024 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Europe's only homegrown electric vehicle (EV) battery maker, Northvolt (Stockholm, Sweden), is to cut 1,600 jobs and halt expansion works at its main plant in Sweden.
The cuts represent about 20% of the company's global workforce and will be made at its main manufacturing operation, Northvolt Ett in Skellefteå (1,000 positions), Västerås (400 positions) and Stockholm (200 positions). It comes at a time when the EV sector in Europe is going through a downturn with many leading car makers battling growing competition from cheaper Chinese EVs and the ending of government subsidy schemes for EVs in a number of major markets. The company warned the market that major changes were coming earlier this month after it admitted to ongoing production issues and after it had lost a major contract with BMW (Munich, Germany). For additional information, see September 16, 2024, article - Northvolt To Cut Jobs and Delay Battery Gigafactory Projects and July 3, 2024, article - Northvolt Loses $2 Billion BMW Contract for EV Batteries.
Northvolt Ett is the company's only fully operational gigafactory with a nameplate capacity of 16 gigawatt hours (GWh) but in reality, it is only producing around 1 GWh annually so far. In Skellefteå it has now suspended development of the Northvolt Ett expansion project, which would have added an additional 30 GWh of annual cell manufacturing capacity. Earlier this month it placed the Northvolt Ett cathode active material facility in Borlange into care and maintenance due to production and quality issues. It will now buy those materials from Chinese or Korean suppliers. In Västerås, programs and expansion will be slowed at Northvolt Labs, while the company will also reduce the size of its corporate support functions, largely located in Stockholm. In January, Northvolt raised Europe's largest green loan of $5 billion in order to help fund its expansion projects. That loan was destined to fund the expansion at Northvolt Ett, along with the construction of new plants in Europe and North America. For additional information, see January 31, 2024, article - Northvolt Lands $5 Billion for EV Battery Expansions.
Peter Carlsson, chief executive officer and co-founder of Northvolt, commented: "While overall momentum for electrification remains strong, we need to make sure that we take the right actions at the right time in response to headwinds in the automotive market, and wider industrial climate. We now need to focus all energy and investments into our core business. Success in the ramp-up of production at Northvolt Ett is critical for delivering to our customers and enabling sustainable business operations. Recent production records at Northvolt Ett show that we are on the right path, but the decisions we're taking today, however tough, are required for Northvolt's future."
The Swedish government has said that it has no plans to financially help the privately-held company. Speaking to the media, Prime Minister Ulf Kristersson said: "There is no doubt that we are committed to Sweden being a good place for new technology that is needed in the green transition, but it is not relevant for the Swedish state to step in and take a stake".
Industrial Info is tracking its two largest international gigafactory projects, Northvolt Six in Canada and Northvolt Drei in Heide, northern Germany. Construction of the 5 billion-euro ($5.4 billion) Heide gigafactory got underway in April, with the help of a generous financial package from the German government. For additional information, see April 9, 2024, article - Northvolt Starts Work on German Battery Gigafactory.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The cuts represent about 20% of the company's global workforce and will be made at its main manufacturing operation, Northvolt Ett in Skellefteå (1,000 positions), Västerås (400 positions) and Stockholm (200 positions). It comes at a time when the EV sector in Europe is going through a downturn with many leading car makers battling growing competition from cheaper Chinese EVs and the ending of government subsidy schemes for EVs in a number of major markets. The company warned the market that major changes were coming earlier this month after it admitted to ongoing production issues and after it had lost a major contract with BMW (Munich, Germany). For additional information, see September 16, 2024, article - Northvolt To Cut Jobs and Delay Battery Gigafactory Projects and July 3, 2024, article - Northvolt Loses $2 Billion BMW Contract for EV Batteries.
Northvolt Ett is the company's only fully operational gigafactory with a nameplate capacity of 16 gigawatt hours (GWh) but in reality, it is only producing around 1 GWh annually so far. In Skellefteå it has now suspended development of the Northvolt Ett expansion project, which would have added an additional 30 GWh of annual cell manufacturing capacity. Earlier this month it placed the Northvolt Ett cathode active material facility in Borlange into care and maintenance due to production and quality issues. It will now buy those materials from Chinese or Korean suppliers. In Västerås, programs and expansion will be slowed at Northvolt Labs, while the company will also reduce the size of its corporate support functions, largely located in Stockholm. In January, Northvolt raised Europe's largest green loan of $5 billion in order to help fund its expansion projects. That loan was destined to fund the expansion at Northvolt Ett, along with the construction of new plants in Europe and North America. For additional information, see January 31, 2024, article - Northvolt Lands $5 Billion for EV Battery Expansions.
Peter Carlsson, chief executive officer and co-founder of Northvolt, commented: "While overall momentum for electrification remains strong, we need to make sure that we take the right actions at the right time in response to headwinds in the automotive market, and wider industrial climate. We now need to focus all energy and investments into our core business. Success in the ramp-up of production at Northvolt Ett is critical for delivering to our customers and enabling sustainable business operations. Recent production records at Northvolt Ett show that we are on the right path, but the decisions we're taking today, however tough, are required for Northvolt's future."
The Swedish government has said that it has no plans to financially help the privately-held company. Speaking to the media, Prime Minister Ulf Kristersson said: "There is no doubt that we are committed to Sweden being a good place for new technology that is needed in the green transition, but it is not relevant for the Swedish state to step in and take a stake".
Industrial Info is tracking its two largest international gigafactory projects, Northvolt Six in Canada and Northvolt Drei in Heide, northern Germany. Construction of the 5 billion-euro ($5.4 billion) Heide gigafactory got underway in April, with the help of a generous financial package from the German government. For additional information, see April 9, 2024, article - Northvolt Starts Work on German Battery Gigafactory.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
