Northvolt's Cutbacks Put Europe's Battery Production at Risk

Europe’s future automotive battery production capabilities are under threat with Northvolt's announcement of slimmed-down production and job cuts as electric vehicle sales flag.

After losing a $2 billion contract from BMW in June, CEO and ex-Tesla executive Peter Carlsson says the company he co-founded in 2016 will stop producing cathode active material (CAM), a vital battery component, scrap plans for a Swedish facility and seek investors for a plant in Poland, Reuters reports. He adds that the company will focus on its core business of making battery cells.

The decision brings to an end the company’s ambition to become a one-stop shop offering automakers everything from material production and battery making to end-of-life recycling.

Northvolt will now need to buy CAM from Chinese or South Korean suppliers, says a person familiar with the matter.

Andy Leyland, co-founder of supply chain specialist SC Insights, tells Reuters: “Northvolt was the doyen of European battery industry and if they can't produce (batteries), it really shows that, industrially, Europe is going to be incredibly dependent on Asia going forward.”