Northvolt Scales Back: Gigafactory Plans Take a Hit Amid Strategic Review

Battery maker Northvolt is suspending cathode active material production at its gigafactory in Sweden and cutting costs. This move could lead to job losses. The company, which has faced production delays and a large order cancellation from BMW, will now import cathode materials and explore partnerships and investments.

In a strategic move, battery manufacturer Northvolt announced on Monday that it would pause cathode active material (CAM) production at its Swedish gigafactory and implement cost-cutting measures. This decision, following a comprehensive review, may result in job losses as the company scales back its rapid expansion plans.

Northvolt, a key player in Europe's emerging battery industry, has experienced production delays and a significant order cancellation from BMW. Consequently, plans for a new production plant in Borlange, Sweden, have been scrapped. "No final decisions have been made on the precise nature of any workforce resizing," the company stated, adding that discussions with unions are ongoing to minimize redundancies.

With CAM production on hold, Northvolt will now import these materials, according to Daniel Brandell from Uppsala University's Angstrom Advanced Battery Centre. Despite these setbacks, Northvolt remains committed to its gigafactory projects in Germany, Canada, and a joint venture with Volvo Cars in Gothenburg, Sweden, though some delays are anticipated. The company also plans to engage potential partners and investors for its upcoming factory in Gdansk, Poland, citing a positive long-term outlook for the sector.

(With inputs from agencies.)