Northvolt, the Swedish battery giant, announced on Monday that it will lay off 1,600 workers, as the electric vehicle industry faces increasing challenges. The cuts will impact three key sites: 1,000 jobs in Skellefteå, where the expansion of Northvolt Ett, Europe’s first battery gigafactory, has been suspended; 400 jobs in Västerås, the site of Northvolt Labs; and 200 jobs at the company’s Stockholm headquarters.
Despite Northvolt’s reputation as Europe’s top competitor to China’s dominant battery producers, the company has been under pressure due to slow growth in consumer demand for electric vehicles. In August, EU car sales dropped to 643,000, compounding industry-wide concerns. While Northvolt CEO Peter Carlsson acknowledged that "momentum for electrification remains strong," he emphasized that "tough" decisions were necessary to secure the company's future.
"Success in ramping up production at Northvolt Ett is critical to delivering for our customers and ensuring sustainable operations," Carlsson said. The Skellefteå site will now focus on scaling production capacity to 16GWh, but plans to increase capacity by an additional 30GWh have been paused.
This decision follows weeks of uncertainty for Northvolt employees, who have faced reports of financial difficulties and halted expenses. The layoffs come amid broader industry challenges, with automakers like Tesla and Volkswagen also announcing large-scale job cuts in response to slowing EV demand.
Toxic Leak Incident
In a separate development, Swedish broadcaster SVT reported that Northvolt's Skellefteå factory had experienced leaks of NMP, a toxic chemical used in battery manufacturing. The leaks were attributed to faulty pipes that couldn't withstand the Arctic climate. However, Northvolt refuted the claim, stating that the facility was designed for the region’s weather and that all emissions were managed in line with permits.
Despite these setbacks, Carlsson remains optimistic about the company’s trajectory, stating that recent production milestones show the company is "on the right path." All job cuts are subject to ongoing union negotiations.
