Novo Energy cuts workforce by 50% as it faces financial pressure following the collapse of former co-owner Northvolt. On Monday, the company announced the decision to reduce jobs as part of ongoing cost-control efforts.
CEO Adrian Clarke confirmed the move, stating, “Despite our best efforts to secure our business and an extensive search for a suitable new technology partner, the current economic challenges and market conditions have made it impossible to maintain our operations at the current scale.”
Volvo Cars and Northvolt launched Novo Energy in 2021 to build a dedicated EV battery factory in Gothenburg, Sweden. Their goal was to secure a stable battery supply chain within Europe.
Northvolt’s bankruptcy in March 2025 disrupted that vision. The once-promising battery startup had been Europe’s top hope for battery innovation but failed to sustain operations.
In response to these challenges, Novo began cost-cutting in January, laying off 30% of its workforce. The latest round of cuts affects an additional 150 employees, as confirmed by a company spokesperson.
Despite the layoffs, Novo continues to pursue its original goal. The company remains committed to producing batteries in Gothenburg with a future technology partner.
Novo also plans to maintain limited operations. The team will finalize the first phase of construction while exploring ways to restart large-scale production.
Volvo Cars, now poised to take full ownership of Novo, supports the long-term vision. In February, Volvo agreed to purchase Northvolt’s 50% stake for a token sum, pending final approval.
A Volvo spokesperson confirmed shared objectives with Novo but didn’t provide further details. This acquisition positions Volvo to steer the battery project independently, although financial constraints may slow progress.
In April, Volvo’s CFO said the company doesn’t plan any major investments soon. Meanwhile, CEO Hakan Samuelsson reported that the factory structure is nearly complete, but the site still lacks battery production equipment.
Samuelsson highlighted the need for a technology partner to move forward. He also suggested that Volvo might share the facility with other Geely Group brands to offset costs and expand utility.
As Novo scales back, its future hinges on strategic partnerships and a rebound in market conditions. The decision to cut staff underscores broader difficulties in Europe’s battery sector and raises concerns about the region’s ability to compete globally.
