Northvolt
Northvolt AB is a large battery developer based in Sweden. The company specializes in lithium-ion technology for electric cars and trucks.
Source: @NicklasNilsso14/X
The company was founded in 2015 by two former Tesla execs and found immediate success in the industry with prior knowledge and connections. However, slowing EV sales after the initial excitement on the market has been worrying Tesla and other car makers.
The Layoffs
Although the exact numbers of the layoffs have not been made public yet, it is assumed that a large portion of its workforce will need to be laid off to compensate for the massive deficit.
Source: @NicklasNilsso14/X
Northvolt previously stated that around 3,000 workers are currently employed at the Northvolt Ett Upstream factory in Skellefteå, which will soon be shut down to help the company’s efforts to survive amid massive losses.
Sweden Has Strong Employee Unions
The Scandinavian country has exceptionally strong employee unions that work diligently to protect the rights of everyday workers.
Source: @riktpunkt/X
This means that the company will need to come to an agreement with union leaders before any mass layoffs can occur.
Minimizing Damage
The company has promised to do everything possible to minimize the damage caused by the layoffs.
Source: @EpochTimesSWE/X
However, Northvolt has also noted that letting go of current employees is an unavoidable reality of its current situation.
Other Methods To Save the Company
In addition to laying off employees, the company has said that it will be selling its factory in Gdansk, Poland while seeking out new projects with partners in Canada and Germany.
Source: @Waterkeeper/X
Northvolt was also forced to scrap its plans for a new factory in Borlänge, Sweden, to increase production.
The Cancelled Order
The financial issues stem from a cancelled order from BMW for 2 billion US dollars worth of electric car batteries.
Source: @BlendrNews/X
As of last year, the company was valued by investors at $12 billion and has been backed by several notable blue-chip investors like Blackrock, Goldman Sachs, Volkswagen, and a Singaporean sovereign wealth fund GIC.
Restructuring the Business
“As difficult as this will be, focussing on what is our core business paves the way for us to build a strong long-term foundation for growth that contributes to the Western ambitions to establish a homegrown battery industry,” Peter Carlsson, Northvolt’s CEO and co-founder, said in the statement.
Source: @Ambrosetti_/X
The broader electric vehicle industry has been causing financial strife for the company for months now.
A Slowing EV Market
The boom of electric vehicles on the road was party caused by the excitement and novelty of the new invention. But in recent months, the EV market has been slowing, with a notable market downturn with super-popular EV company, Tesla.
Source: XPeng
In the European market, registrations for EVs declined by 3% year-over-year in May, according to the European Alternative Fuels Observation in July.
Shrinking Operations
To mitigate some of the damage from the failed BMW order, the company will need to make large cuts and restructure its finances.
Source: Carlos Aranda/Unsplash
The large Ett Upstream 1 factory will be placed “into care and maintenance until further notice” until sales can resume and production can continue.
Another Closed Factory
In the town of Kvarnsveden in Borlänge, Sweden, the company’s Northvolt Fem program will be terminated.
Marcin Jozwiak/Pexels
The company has already sold the site, which it acquired in 2022.
Integrating Business in the US
In the United States, the company has said that it will be integrating its California subsidiary Cuberg and lithium metal technology into its Northbolt Labs unit in Sweden.
Source: Maurizio Pesce/Wikipedia Commons
The full restructuring will hopefully quell some of the financial pressure the company is currently facing.