Volvo’s Battery Unit Novo Energy Announces Major 50% Layoffs

Novo Energy, the battery manufacturing initiative co-founded by Volvo Cars and Northvolt, announced that it would cut 50% of its employees, with a loss of roughly 150 jobs. This follows a previous 30% cut in staff in January, and Novo cited persistent economic issues and Northvolt filed for Chapter 11 bankruptcy in November 2024.

Founded in 2021, Novo Energy was supposed to be able to produce batteries for electric vehicles at a specialized facility in Gothenburg, Sweden. Sadly, Northvolt’s financial uncertainty and bankruptcy prevented those plans from coming to fruition. So, Volvo Cars has agreed to purchase North Volts 50% share in Novo Energy for a nominal amount of money, contingent upon approval from certain authorities.

Novo Energy has announced that it plans to maintain a limited footprint during this phase while completing the first phase of construction at the Gothenburg facility. The company is also looking for potential futures that could allow for a big return of activities with a new technology partner.

Volvo Cars said that they think taking full ownerships of Novo Energy — which would have little impact on other investments. The automaker said it is considering different options for the Gothenburg facility and possible partnerships with other Geely brands.

Northvolt’s bankruptcy has impacted the broader context of the European electric vehicle landscape, revealing or highlighting startup challenges in scaling production and competing with larger manufacturers. The struggles of this company emphasize the necessity of being strategic and learning from experiences in the rapidly changing electric vehicle space.

As the situation develops, Novo Energy’s future will depend on securing new partnerships and navigating the complex landscape of battery production and electric vehicle manufacturing.