Sweden’s Northvolt AB will shed 20% of its international workforce and pause its growth plans to sluggish money outflows because the battery-making agency confronts a burgeoning monetary squeeze.
The corporate, which has struggled in its mission to face up a home-grown provide of electric-vehicle batteries in Europe, stated it should scale back its Swedish workforce by 1,600 positions as a part of a strategic evaluation that was introduced this month.
The cash-saving transfer comes as Northvolt continues to barter a brand new financing pact with its collectors and buyers. The corporate in January reached settlement on a $5 billion inexperienced mortgage facility, taking its general debt and fairness commitments to greater than $13 billion. Lenders have chosen funding financial institution PJT Companions to assist advise on choices, Bloomberg Information reported final week.
The producer’s quickly mounting challenges have positioned in danger Europe’s ambition to construct an EV battery-making champion. The corporate, which earlier this yr was considering an preliminary public providing, has come underneath rising pressure as a manufacturing ramp-up faltered, EV demand slowed and battery-cell competitors from China intensified.
Northvolt has additionally confronted a string of well being and security issues starting from employee deaths and accidents to stories of poisonous chemical leaks. Native enterprise day by day Dagens Industri reported this month that the corporate was seeking to increase 7.5 billion kronor ($737 million) to make September’s payroll.
The corporate stated Monday it was paring again different plans to give attention to elevating manufacturing at its essential plant in Skelleftea, in northern Sweden. Greater battery-cell output would assist generate much-needed income, a objective that’s to this point confirmed elusive. BMW AG backed out of a €2 billion ($2.1 billion) order in June after experiencing high quality points, whereas lead investor Volkswagen AG’s Scania vehicles has complained of sluggish deliveries.
Volkswagen, proprietor of an about 20% stake in Northvolt, on Monday reiterated its assist for ramping up the corporate’s current manufacturing traces. It declined to touch upon any monetary investments. BMW stated it hadn’t modified its funding within the battery maker, which stood at 2.8% on the finish of 2023, and had no plans to take action. A spokesman declined to touch upon whether or not it could participate in any additional funding rounds to take care of its possession degree.
Northvolt’s job losses quantity to 25% of its Swedish workers, and 20% worldwide. The native reductions will probably be cut up throughout its essential Skelleftea manufacturing unit, the place 1,000 jobs will probably be reduce, its plant in Vasteras with 400 staff and Stockholm with 200 positions, in response to Monday’s assertion. All redundancies are topic to ongoing union negotiations, the corporate stated.
“It’s extremely unhappy to should announce this in an organization that you’ve got labored 24 hours a day for over the last eight years,” Chief Govt Officer Peter Carlsson stated on native radio. He added that he’ll present an replace on investor talks as soon as there’s extra data. “We’re constantly working, in dialog with buyers,” he stated.
The corporate stated it should droop an growth venture at Skelleftea, the place an added 30 gigawatt hours of annual cell-manufacturing capability had been deliberate. The choice follows an announcement earlier this month to position its cathode energetic materials facility “into care and upkeep.”
In Vasteras, Northvolt will sluggish the applications and growth at Northvolt Labs.
“It has taken longer and required extra efforts right here in Skelleftea to ramp up manufacturing,” Carlsson stated. “Though we’ve seen constructive tendencies up to now few weeks, we’ve to be extra centered, scale back prices and thereby scale back our want for capital to achieve profitability sooner.”