Northvolt Update on initial outcomes from its strategic review
London, September 09, 2024, (Oilandgaspress) – Northvolt is today announcing its initial steps to be taken as part of its strategic review. These measures reflect a challenging macroeconomic environment and our subsequent reassessment of Northvolt’s near-term priorities, leading to a re-scope of operations and appropriate resizing of our workforce.
The strategic review’s core objective is to focus resources on becoming a leader in sustainable large-scale cell manufacturing. This endeavour entails ramping up the first phase of the Northvolt Ett gigafactory, Sweden, whilst continuing to leverage the world-class R&D facility Northvolt Labs, in Västerås, Sweden. This is a key requirement for Northvolt to maintain its position as a leading cell manufacturer in the Western world.
Peter Carlsson, CEO and Co-Founder of Northvolt, commented: “With the strategic review now underway, we are having to take some tough actions for the purpose of securing the foundations of Northvolt’s operations to improve our financial stability and strengthen our operational performance. While conditions at this time are challenging, there remains no question that the global transition towards electrification — and the long-term outlook for cell manufacturers, including Northvolt — is strong.”
Tom Johnstone, Interim Chairman of the Northvolt Board of Directors, commented: “Our success is in part dependent on the overall market ramp-up of electric vehicles and support from stakeholders around us. Equally, we must build on lessons learnt through our journey to date.”
While Northvolt’s challenges remain highly relevant in the short-term, they have not changed the long-term foundations supporting Northvolt’s key value proposition. The competitiveness of transatlantic markets, the regionalization of supply chains, as well as the importance of the battery industry in fighting climate change are still key issues where Northvolt can play a significant role.
Focusing our scope of activities
As part of our strategic review, the Northvolt Board has agreed to the following actions:
In Skellefteå, Sweden, Northvolt intends to place operations at Northvolt Ett Upstream 1 cathode active material production facility into care and maintenance until further notice. This is motivated by a necessity to streamline operating costs, as well as optimize the sequencing of Northvolt Ett’s ramp-up.
In Borlänge, Sweden, the Northvolt Fem program on the Kvarnsveden site will be terminated. The site was acquired by Northvolt in 2022 and was envisioned as a new facility for cathode active material production. Northvolt has concluded an agreement for the sale of the site.
In Gdańsk, Poland, Northvolt aims to assure the successful future of Northvolt Systems, including Northvolt Dwa, Europe’s largest battery systems production facility. To enable this, Northvolt will enter into discussions with potential future partners and investors that can capitalize the production of battery systems and packs.
In California, United States, Northvolt has already communicated its intention to integrate its subsidiary Cuberg and lithium metal technology into Northvolt Labs, Sweden.
Impacts on Northvolt’s workforce
The cost-saving mechanisms necessary for Northvolt to meet its core objective of focussing on large-scale cell manufacturing will regrettably include some difficult decisions on the size of our workforce to match the needs of a reduced scale of operations. No final decisions have been made on the precise nature of any resizing. We remain in constructive discussions with the unions, and will ensure that every effort is made to minimize the need for redundancies.
“As difficult as this will be, focussing on what is our core business paves the way for us to build a strong long-term foundation for growth that contributes to the Western ambitions to establish a homegrown battery industry,” Peter Carlsson concluded.
Preparing for Northvolt’s future
In line with its focus on large-scale cell manufacturing, Northvolt remains committed to NOVO (Sweden), Northvolt Drei (Germany), and Northvolt Six (Canada), and is in close dialogue with the key stakeholders involved.
Potential revisions to the timelines of these projects will be confirmed during the fall, along with any further necessary cost-saving actions. In the meantime, work continues on all sites and Northvolt remains grateful for the support of its government and municipal partners across all three locations.
Northvolt will share more information as it advances its strategic review process in the coming weeks and months.
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