electronic vehicle

Job Cuts: Swedish Green Battery Developer & Manufacturer Lays off 1,600 Employees Amidst Financial Woes

The Swedish battery maker giant Northvolt announced a major restructuring section on Monday. As the EV market struggles with lowering demand, Northvolt informed them it will sack 1,600 employees.

Northvolt, a key player in Europe’s clean energy drive, declared it will cut jobs across all three of its sites.

This significant decision comes as the Electric Vehicle (EV) industry faces low demand, and financial debts incurring both production and demand.

The projected job cut is proposed to take 1,000 jobs in Northvolt Ett in Skellefteå, northern Sweden, where the company is halting its expansion plans.

On the other hand, 400 employees will be affected in Västerås, where Northvolt Labs is based, and 200 at its headquarters in Stockholm.

This decision will impact Europe's clean energy goals as Northvolt was the biggest contender against the Chinese battery makers.

Peter Carlsson, Northvolt's CEO and co-founder, spoke on this decision and said, "Overall momentum for electrification remains strong" but tough decisions are necessary to ensure the company's future.

He further explained, "While overall momentum for electrification remains strong, we need to make sure that we take the right actions at the right time in response to headwinds in the automotive market, and wider industrial climate."

Northvolt's decision is deeply influenced by the recently cancelled contract with BMW. This is because Northvolt's biggest clients include BMW and Volkswagen.

Northvolt's decision also comes as EU sales of electric vehicles dropped to 643,000 in August 2024.

The job cut comes as an additional shock to an already deteriorating industry, including 14,000 announced by Tesla earlier this year. And thousands linked to potential factory closures by Volkswagen in Germany.

Another problem for Northvolt is on the rise as Swedish broadcaster SVT reported that faulty pipes at Northvolt's Skellefteå factory leaked toxic chemical NMP due to inadequate design for the Arctic climate.

Northvolt responded that the leaks were not caused by building design and that emissions were handled according to permits.

As per a statement from a Northvolt spokesperson, "The factory is built for the climate in Skellefteå. The part of the building that receives NMP is not directly related to building design, so leaks should not be related to the design. We have taken preventative and corrective measures to prevent and minimize any incidents."

Now, Northvolt's job cuts and financial struggles raise concerns about the electric vehicle sector's growth prospects.

As the industry navigates headwinds, companies like Northvolt must adapt to ensure sustainability. Northvolt is a major player in competing with Chinese battery makers' dominance in the EV market.