Business
Volvo Cars seeks to oust Northvolt from EV battery venture
Published by Jessica Weisman-Pitts
Posted on October 30, 2024
3 min readLast updated: January 14, 2025
Global Banking and Finance Review
Company
Published by Jessica Weisman-Pitts
Posted on October 30, 2024
3 min readLast updated: January 14, 2025
By Stine Jacobsen and Marie Mannes
STOCKHOLM (Reuters) -Volvo Cars is seeking to take over Northvolt’s stake in their Swedish battery-making joint venture NOVO but will need a new partner to keep plans for a gigafactory on track, the Chinese-owned automaker said on Wednesday.
Northvolt, once hailed as Europe’s best shot at a home-grown electric-vehicle battery champion is racing to stay afloat by slimming down and cutting jobs, hobbled by production problems, loss of a major customer contract and a lack of funding.
Europe’s journey towards self-reliance in EV battery production, crucial for its green transition and independence from Chinese makers, has been hit by volatility with numerous projects being postponed or scrapped.
Northvolt said separately it had decided not to contribute further capital to NOVO “at this point in time” and was in active discussions with Volvo Cars on the way forward for NOVO Energy.
Evan Hartley, analyst at Benchmark Mineral Intelligence, said the move could be beneficial for the struggling battery maker.
“It fits with what Northvolt have been doing over the past few months to cut down their scope from very ambitious plans towards more of a streamlined approach,” Hartley told Reuters.
On the flip side this again highlights a position in which a guaranteed customer of theirs is moving away from using Northvolt as a direct supplier.
Volvo Cars, majority-owned by China’s Geely, has battery supply deals with LG, CATL and Northvolt, it previously told Reuters.
A spokesperson for NOVO told Reuters as late as Friday that production was still on track to start in 2026. The company declined to comment on Wednesday.
Volvo Cars formed the NOVO joint venture in 2021 with Northvolt to build a gigafactory in Gothenburg in southwest Sweden, aiming to produce batteries for electric cars.
Any battery production at NOVO Energy is dependent on third party or other partner involvement,” Volvo Cars said in its statement on Wednesday, while adding this would not impact its own vehicle roll-out plan.
A Volvo spokesperson declined to elaborate on potential partners.
The NOVO Energy battery cell plant was expected to cost 30 billion Swedish crowns ($2.8 billion), the companies said in 2021.
Volvo Cars has so far put around 3 billion Swedish crowns into the joint venture, the spokesperson said, declining to comment on whether it would pay anything for its partner’s stake.
Global automakers including Volvo have scaled back their electrification targets, hurt by slowing demand for EVs amid a lack of affordable models, slow roll-out of charging points, trade tensions and competition from cheaper Chinese rivals.
Northvolt has said it is in talks with investors and lenders to secure funding and has made significant progress towards a financing deal.
Volvo Cars CEO Jim Rowan said this month the company would not put any money into Northvolt.
($1 = 10.6381 Swedish crowns)
(Reporting by Stine Jacobsen and Marie Mannes; editing by Terje Solsvik, Jason Neely and Elaine Hardcastle)
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