Battery maker Northvolt to lay off 1,600 jobs in Sweden

Lay off by Northvolt: Swedish battery maker Northvolt plans to lay off 1,600 employees in Sweden, or around one fifth of its global workforce, as slower than expected demand for electric vehicles takes a heavy toll on the auto industry.

Billed as a frontrunner in Europe's effort to build an automotive battery industry of its own, Northvolt has in recent month scaled back several initiatives after a series of commercial and operational setbacks.

The group said on Monday it would suspend plans for a large expansion of its Northvolt Ett factory in Skelleftea, northern Sweden, adding it would focus resources on accelerating production of battery cells at the plant and prioritising commitments to its existing automotive customers.

With Volkswagen among its owners, Northvolt has led a wave of European startups investing tens of billions of dollars in battery production to serve the continent's automakers as they switch from internal combustion engines to EVs.

But growth in EV demand is moving at a slower pace than some in the industry had projected, and competition remains stiff from China, which controls 85 per cent of global battery cell production, International Energy Agency data shows.

Northvolt said it would focus on ramping up the first 16 gigawatt-hours (GWh) of annual battery cell production capacity at Northvolt Ett, while shelving a construction project that had aimed at increasing its capacity by another 30 GWh.

Sweden's Prime Minister Ulf Kristersson said on Sept. 13 that while he wanted companies engaged in green technologies to thrive, the government would not take a stake in Northvolt.

Kristersson's statement followed a Northvolt announcement that it would suspend cathode active material production at Northvolt Ett, while the construction of plants in Germany, Canada and southern Sweden was either delayed or at risk.