Northvolt announced on September 23rd the global workforce reduction of 20%, with a 25% reduction in Sweden, and it will focus on ramping up the first 16 GWh battery cell production capacity at Northvolt Ett.
The company had just recently announced a plan to cut jobs and, in response to increasing pressure to reduce costs, has halted operations at the Northvolt Ett Upstream 1 cathode material factory in Skellefteå, Sweden, sold the Northvolt Fem factory in Borlänge, which was previously acquired for cathode material production, and is seeking a partner for its battery system and module factory in Gdańsk, Poland. These deprioritized businesses are all non-core operations for Northvolt, which will now focus on achieving the initial 16 GWh battery annual production capacity planned for the Northvolt Ett factory in Skellefteå.
According to the company's latest announcement, approximately 1,600 jobs will be cut in Sweden, with 1,000 layoffs in Skellefteå, 400 in Västerås, and 200 in Stockholm. The layoffs in Skellefteå involve the suspension of an additional 30 GWh battery production capacity expansion and the shutdown of the aforementioned cathode material factory. The layoffs in Västerås will impact on the company's R&D department, with the expansion of the Northvolt Labs R&D center being "slowed down". The layoffs in Stockholm will mainly affect the company's down-sizing administrative department. All layoffs are subject to ongoing negotiations with trade unions. As of the end of 2023, Northvolt had a total of 5,860 employees worldwide.
Peter Carlsson, CEO and co-founder of Northvolt, commented, "While the overall momentum for electrification remains strong, we need to ensure that we take the right actions at the right time in response to headwinds in the automotive market and the broader industrial climate. We must now focus all our energy and investments into our core business."
Northvolt is now scaling back its ambitious expansion plans and aims to focus on its core business to achieving the initially planned 16 GWh battery capacity. Carlsson considers the ramp-up of battery production at the Northvolt Ett factory crucial, and considerable efforts have been made, with the factory's battery output reportedly tripling since the beginning of the year.
Since the start of production at the end of 2022, the Northvolt Ett battery factory in Skellefteå has suffered from low yields and significant production waste, increasing battery production costs and significantly delaying the production ramp-up, resulting in battery output far below the originally planned schedule. This directly led to BMW, a shareholder of Northvolt, canceling a billion-dollar order contract in May of this year.
The announcement did not mention Northvolt's plans for battery factories in Germany and Canada. However, according to previous news, the battery factories in both countries may be delayed. The Canadian battery factory, originally scheduled to start production in 2026, may be delayed by up to 18 months to 2028. The Heide battery factory in Schleswig-Holstein, Germany, held its groundbreaking ceremony in March of this year and is currently scheduled to begin production trials in 2028.
Northvolt is not the first battery manufacturer to adjust its production plans. In June of this year, ACC (Automotive Cells Company), a joint venture between Stellantis, Mercedes-Benz, and TotalEnergies, announced the suspension of construction of its battery factories in Kaiserslautern, Germany, and Termoli, Italy, to switch to a different battery chemistry. Additionally, in the second quarter of this year, SVOLT also announced the shelving of its battery factory in Lauchhammer, Brandenburg, which was announced in September 2022. It is reported that the battery factory of LG Energy Solution and Koç in Turkey has also been on hold for some time.
