Northvolt's Setback: Europe's EV Battery Future in Jeopardy

Northvolt's decision to scale down operations and cut jobs has raised concerns about Europe's ability to produce electric vehicle batteries locally. Despite securing $50 billion in orders, the company faces production delays, canceled contracts, and a need for further investment.

Northvolt's surprising decision to shrink its operations and cut jobs has ignited fears regarding Europe's ability to sustain a home-grown electric vehicle battery champion, industry experts and insiders revealed to Reuters.

Hampered by order delays and the loss of a $2 billion BMW contract in June, CEO and former Tesla executive Peter Carlsson announced the company would discontinue producing cathode active material—a key battery component—scrap plans for a Swedish facility, and search for investors for a plant in Poland. The Swedish firm will now prioritize its core battery cell production.

This shift means Northvolt, Europe's most advanced battery company, steps back from its all-encompassing original mission. It raises significant questions about Northvolt's capacity to drive Europe's electric mobility future, especially amid competitive tension with Chinese firms, analysts told Reuters.

(With inputs from agencies.)