Northvolt to Lay Off 1,600 Employees Amid Sluggish EV Demand

Swedish battery maker Northvolt plans to lay off 1,600 employees in Sweden due to slower-than-expected demand for electric vehicles. The company is scaling back several initiatives and suspending expansion plans. Northvolt will focus on ramping up battery cell production and prioritize commitments to existing automotive customers.

Swedish battery maker Northvolt is set to lay off 1,600 employees in Sweden, accounting for around one fifth of its global workforce, amid slower-than-expected demand for electric vehicles, which is impacting the auto industry heavily.

Considered a leader in Europe's automotive battery industry, Northvolt has scaled back several initiatives recently due to multiple commercial and operational setbacks. The company announced the suspension of plans to expand its Northvolt Ett factory in Skelleftea, northern Sweden, opting instead to accelerate existing battery cell production and prioritize commitments to current automotive customers.

Owned partly by Volkswagen, Northvolt has spearheaded European startups investing heavily in battery production to transition automakers from internal combustion engines to EVs. Yet, the growth in EV demand is slower than anticipated, with fierce competition from China, which dominates 85% of global battery cell production, according to the International Energy Agency. Northvolt will now focus on the initial 16 GWh of battery cell production annually at Northvolt Ett while shelving a project to add another 30 GWh. Sweden's Prime Minister Ulf Kristersson acknowledged the situation, stating the government would not take a stake in the company despite its importance in green technologies.

(With inputs from agencies.)