STOCKHOLM (Reuters) -Swedish battery maker Northvolt said on Monday it would cut costs and look for strategic partners while focusing on its large-scale cell manufacturing as the company seeks to curb its rapid expansion.
The announcement follows a major review of Northvolt’s strategy intended to refocus its business following a series of setbacks such as production delays and the cancellation of a large order by Germany’s BMW.
“These measures reflect a challenging macroeconomic environment and our subsequent reassessment of Northvolt’s near-term priorities,” the company said in a statement.
Cost cuts would include adjusting the workforce and pausing cathode active material production at Northvolt’s gigafactory in Skelleftea in Sweden, it said. The company did not elaborate how it would adjust its workforce, saying it was in talks with unions and no final decisions had been made.
“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,” it said.
Northvolt is part of a wave of European startups investing tens of billions of dollars in lithium-ion battery production to serve the continent’s automakers as they switch from internal combustion engine cars to emission-free electric vehicles.
But the growth in EV demand is moving at a slower pace than some in the industry had projected, and competition is stiff from battery producers and automakers in Asia and North America.
While Northvolt remained committed to its planned gigafactories in Germany and Canada, as well as in Gothenburg, Sweden, through a joint venture with Volvo Cars, the projects could face delays.
It said that while market conditions were challenging, the long-term outlook for its sector was strong.
(Reporting by Marie Mannes abd Anna Ringstrom, editing by Terje Solsvik and Emelia Sithole-Matarise)
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