In a significant development, the Swedish battery manufacturer Northvolt has announced the reduction of 1,600 jobs due to prevailing difficulties in the electric car industry.
Northvolt, a leading European battery producer, will cut jobs across three of its sites. The most substantial impact will be at its Skellefteå facility in northern Sweden, where 1,000 jobs will be lost, and the planned expansion of Northvolt Ett, Europe’s first homegrown battery gigafactory, will be halted. An additional 400 jobs will be cut in Västerås, the site of Northvolt Labs in central Sweden, and 200 positions will be eliminated at its Stockholm headquarters.
Peter Carlsson, Northvolt’s chief executive and co-founder, acknowledged the challenging circumstances, citing ‘headwinds’ in the automotive market and the broader industrial environment. Despite these challenges, he emphasised that the overall momentum for electrification remains strong. The company aims to focus all its energy and investments on its core business, and to ensure future sustainability amid current adversities.
Employees at Northvolt have faced uncertainty for weeks due to reports of financial problems and a suspension of expenses. With cost-cutting measures, including job cuts, already underway, the company is also seeking new investment to secure its financial stability. Last week, industry figures indicated a decline in consumer demand for greener vehicles, contributing to the broader issues faced by the sector.
Carlsson stated, ‘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.’ He further added that recent production records at Northvolt Ett demonstrate progress but stressed the necessity of current decisions for future success.
Northvolt’s decision follows a similar trend in the industry, with significant job cuts announced by other major players, including Tesla and Volkswagen. The reduction in workforce is part of a larger wave of adjustments as the sector grapples with slower-than-expected growth in electric vehicle sales.
Separately, Swedish broadcaster SVT reported that faulty pipes at Northvolt’s Skellefteå factory leaked a toxic chemical, NMP, used in battery manufacturing. Although the facility is designed for the Arctic climate, the leaks were not attributed to design flaws. Northvolt assured that preventive and corrective measures, alongside detailed risk assessments, are in place to handle such incidents.
Northvolt’s decision to cut 1,600 jobs reflects the broader challenges facing the electric car industry. The company’s focus on core operations and strategic adjustments aims to ensure its resilience and future success.
