STOCKHOLM (Reuters) – Swedish battery maker Northvolt will lay off 1,600 people in Sweden, about a fifth of its global workforce, as demand for electric vehicles (EVs) weakens.
Touted as a frontrunner in Europe’s efforts to produce its own batteries, Northvolt has had to scale back its ambitions in recent months after a series of commercial and operational setbacks.
The group said on Monday it was suspending plans to expand its Northvolt Ett plant in Skelleftea, northern Sweden.
It also intends to focus its resources on accelerating battery cell production at the plant and prioritizing its commitments to its existing automotive customers.
Northvolt, which counts Volkswagen among its partners, has, like other start-ups, invested in the production of batteries for European car manufacturers.
However, growth in EV demand is slower than some industry players had expected, and competition from China remains tough.
China controls 85% of global battery cell production, according to data from the International Energy Agency (IEA).
In September, Swedish Prime Minister Ulf Kristersson said he wanted to see companies involved in green technologies prosper, but that the government would not take a stake in Northvolt.
Northvolt had previously announced the suspension of production of active cathode materials at Northvolt Ett, while the construction of factories in Germany, Canada and southern Sweden was either delayed or threatened.
(Reporting Anna Ringstrom and Terje Solsvik; Kate Entringer)
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