European battery maker Northvolt expects to cut jobs as it looks to cut costs despite having raised billions of dollars of funding in the past few years, amid a global economic slowdown and softer demand for battery electric vehicles.
As well as pausing some 'upstream' developments as part of its plans, the Swedish startup said it will now focus on large-scale battery manufacturing and seek new partnerships to secure its market position.
The challenging macroeconomic environment was blamed, forcing the company, where Volkswagen, BMW and FTSE 100-listed Scottish Mortgage IT (LSE:SMT) are major shareholders, to reassess its priorities despite raising $5 billion earlier this year, taking total financing to more than $13 billion in equity and debt, and boasting more than US$55 billion in long-term battery orders.
Rising costs and market pressures were also blamed, with interim chairman Tom Johnstone saying the company's success is "in part dependent on the overall market ramp-up of electric vehicles and support from stakeholders around us".
Last week, Toyota Motor became the latest carmaker to cut its EV production schedule due to a shift in demand and over-supply of EVs, with Polestar and Hyundai others to have recently signalled an EV deceleration and more demand for hybrids.
A key issue for Northvolt is the production of cathode active material, a high-cost exercise where supply chain issues have been seen worldwide.
As part of its strategic review, the company has decided to halt operations at its first cathode active material production facility in Sweden, placing it into care and maintenance, while also terminating the plan for another planned cathode factory plan and selling the land.
Instead, it will optimise ramp-up at its nearby Northvolt Ett gigafactory.
Northvolt said these were the initial steps to be taken as part of its strategic review, towards a "core objective" of focusing its resources on becoming the leading large-scale battery cell manufacturer in the West.