Northvolt to adjust its strategy (and cut workforce) in order to face challenging macroeconomic environment
“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,” said CEO Peter Carlsson. Here's how the ongoing projects will be affected by the current Board decisions.
Northvolt has announced initial outcomes from its strategic review, due to the current challenging macroeconomic environment in the EV business. In other words, the company is about to re-focus its strategy, also looking for possible new partnerships. According to the official press release, Northvolt “will initially focus on large-scale cell manufacturing”.
“This endeavour entails ramping up the first phase of the Northvolt Ett gigafactory, Sweden, whilst continuing to leverage the world-class R&D facility Northvolt Labs, in Västerås, Sweden”. The competitiveness of transatlantic markets, the regionalization of supply chains, as well as the importance of the battery industry in fighting climate change are still key issues where Northvolt can play a significant role.
Northvolt strategy: what will happen in the USA, Sweden, and Poland
More into details, the Northvolt Board has agreed to the following actions:
- In California, United States, Northvolt has already communicated its intention to integrate its subsidiary Cuberg and lithium metal technology into Northvolt Labs, Sweden.
- In Skellefteå, Sweden, Northvolt intends to place operations at Northvolt Ett Upstream 1 cathode active material production facility into care and maintenance until further notice. This is motivated by a necessity to streamline operating costs, as well as optimize the sequencing of Northvolt Ett’s ramp-up.
- In Borlänge, Sweden, the Northvolt Fem program on the Kvarnsveden site will be terminated. The site was acquired by Northvolt in 2022 and was envisioned as a new facility for cathode active material production. Northvolt has concluded an agreement for the sale of the site.
- In Gdańsk, Poland, Northvolt aims to assure the successful future of Northvolt Systems, including Northvolt Dwa, Europe’s largest battery systems production facility. To enable this, Northvolt will enter into discussions with potential future partners and investors that can capitalize the production of battery systems and packs.
The matter of workforce reduction
“No final decisions have been made on the precise nature of any resizing”, stated the company about possible workforce reduction, which have been confirmed anyway. “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,” said CEO Peter Carlsson.
“With the strategic review now underway, we are having to take some tough actions for the purpose of securing the foundations of Northvolt’s operations to improve our financial stability and strengthen our operational performance. While conditions at this time are challenging, there remains no question that the global transition towards electrification is strong”, Carlsson added.
“Our success is in part dependent on the overall market ramp-up of electric vehicles and support from stakeholders around us. Equally, we must build on lessons learnt through our journey to date”, stated Tom Johnstone, Interim Chairman of the Northvolt Board of Directors.
