EV Battery Maker Will Cut Some 1,600 Jobs as Demand Slows

• Northvolt reveals plans to cut some 1,600 jobs in Europe, reducing its global workforce by 20%, amid cost-cutting measures and efforts to slow expansion.

• The Swedish battery supplier has cited headwinds in the EV sphere for forcing it to slow its output and expansion, after several years of rapid growth.

• EV demand is seen as slowing, according to several automakers, and has already resulted in curtailed model plans, plant downtime, and slashed development budgets in Europe and the US.

Swedish EV battery startup Northvolt signaled weeks ago that a significant pullback in its planned operations was on the horizon, amid a growing sense in the industry that the EV momentum of the early pandemic is showing signs of running out of steam.

The company has hinted in recent months that it expanded too quickly over the past few years, in line with industry expectations of the late 2010s, embarking on an ambitious plant building effort in northern Europe.

Now, Northvolt has specified just how many jobs cuts it will face amid what its CEO called "headwinds" in the EV business.

The company said it plans to cut 1,000 positions at its main site in Skellefteå, Sweden, with an additional 400 cuts planned for Västerås, and 200 in Stockholm.

Overall, the cuts will represent 20% of its current global workforce, and 25% in Sweden alone.

"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," said Peter Carlsson, CEO and Co-Founder of Northvolt.

Not all automakers in Europe now share an optimistic view of the rate of EV adoption, after a couple years of fast-paced growth.

In the past few years a number of European automakers including Volvo and VW had struck deals with Northvolt for EV batteries for cars and heavy trucks, including Scania, anticipating a quicker pace of EV adoption.

Now, both VW and Volvo have pared down their EV lineup expectations, with Volvo backing off its earlier goal to go EV-only by 2030. Volvo has not specified just what percentage of its vehicles are likely to be BEV by the end of the decade, but collectively its BEV and PHEV offerings already reached 59% of its sales in Europe in 2023.

Northvolt also reiterated its plans to halt expansion of its Northvolt Ett plant; those additions were aimed at building an extra 30 GWh of annual cell capacity. The company will place the cathode active material production line there into care and maintenance.

Northvolt Labs, located in Västerås, will see a slowdown in expansion as well, as the company hinted earlier this month. Its corporate support personnel in Stockholm will also see reductions in headcount.

"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," Carlsson added.

Will the annual percentage of EV sales reach 20% nationwide by 2030? Let us know what you think in the comments below.