Stockholm, Sweden

Swedish battery manufacturer Northvolt said on Monday that it plans to temporarily halt the CAM business at the Skelleftea gigafactory and plans to reduce costs, which can result in the dismissal of employees. This change has been made as the company has had to put the break on growth due to some recent losses.

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Northvolt is a Swedish company that has been touted as one of the key players in Europe’s battery revolution as it struggled to ramp production and had one of its largest orders, from BMW, cancelled. Also, due to continuously shifting requirements, the company has relinquished its plans of constructing a CAM production facility in Borlange; Sweden.

Specifically, the decision to stop CAM manufacturing in the Skelleftea site has slowed down the supply chain for this critical component of lithium-ion batteries outside of Northvolt. Speaking to the publication, Daniel Brandell, a research leader at Uppsala University’s Angstrom Advanced Battery Centre, said that CAM is the most complicated section of the battery. Brandell added that the company had not been producing a quality in-house CAM, which they order from other CAM manufacturers.

It is also important to note that Northvolt’s Skelleftea gigafactory operational since 2021 has not fully ramped up production. The facility currently has about 3,500 employees and may account for the company’s workforce, which is over 5,000. Although negotiations with unions regarding how to avoid layoffs continue, workforce cutbacks remain an ever-present possibility.

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The company is still focused on its other key initiatives such as planned gigafactories in Germany, Canada, and Gothenburg, Sweden in partnership with Volvo Cars. However, these initiatives may face delays depending on; They are also in talks about partnerships and investments for their next production facility in Gdansk, Poland.

Downward revisions to future EV demand growth, intensified competition from battery manufacturers and automakers in Asia and North America are putting pressure on Northvolt to rethink its plans. Nonetheless, the company is optimistic about the long-term prospects of the sector.