Swedish plant giant Northvolt to cut 1,600 jobs after BMW cancels $2.2 billion contract; ‘Now we need to focus…’ CEO tells employees

Northvoltone of Europe’s leading battery manufacturers, has announced plans to lay off 1,600 employees at its Swedish operations. The move follows a strategic review triggered by the cancellation of a major contract with BMW.
Reports suggest that carmaker BMW, a shareholder, recently canceled a $2.2 billion contract with the company due to production delays.
The company has faced challenges in scaling up production and securing additional financing. To address these challenges, Northvolt is focusing its efforts on ramping up battery production at its Ett manufacturing facility. This change in strategy has required significant job cuts.
The job cuts will be spread across several locations, with the biggest impact being in Skelleftea, where 1,000 jobs will be lost. Västerås and Stockholm will also be affected, with 400 and 200 job cuts respectively.

What CEO Peter Carlsson said

“While the overall momentum towards electrification remains strong, we need to ensure we take the right actions at the right time to respond to the headwinds in the automotive market and the broader industry climate. We must now focus all our energy and investments on our core business,” CEO Peter Carlsson said in a statement.
“The successful ramp-up of production at Northvolt Ett is essential to meet our customers’ expectations and enable sustainable business operations. Recent production records at Northvolt Ett show that we are on the right track, but the decisions we are making today, however difficult, are necessary for the future of Northvolt,” said Carlsson.
Despite the layoffs, Northvolt remains committed to its automotive customers and has implemented an acceleration program to increase production. Recent progress in this area has shown positive results, with a three-fold increase in cell production since the beginning of the year.
However, the company continues to face financial difficulties. Northvolt struggled to close its latest funding round, seeking to raise $1.2 billion but may have settled for less.
The main shareholders of the Swedish battery manufacturer, Volkswagen and Goldman Sachshave not publicly disclosed their plans for future investment in the company. As Northvolt navigates this turbulent period, the outcome of its strategic decisions will determine its long-term viability in a competitive market electric vehicle walk.