Around 400 people are currently working on the construction of the Novo Energy factory in Torslanda, which is located near Volvo Cars' large car factory.
What Volvo Cars' announcement means for the plan for the ongoing factory construction is difficult to say, according to Christian Jebsen, communications manager at Novo Energy. And he does not want to comment on the future for the staff either.
It's something I can't say anything about today, he says to TT.
Breached shareholder agreement
Volvo Cars has, however, chosen not to issue any notices of termination yet.
"There are no immediate changes for the employees at present. Volvo Cars is currently exploring different possible future scenarios for the project," writes Kristin Boldemann Wester on Volvo Cars' press department in an email to TT.
According to Volvo Cars, Northvolt has breached the parties' shareholder agreement by not fulfilling its financial obligations.
"Volvo Cars will exercise its right of withdrawal," the car manufacturer writes in a press release.
Northvolt confirms that the company has not made any "further investment in Novo Energy" as it is currently prioritizing financing of its own production of battery cells.
"The electric car market has challenges and we have decided to conduct a strategic review. But it's important to emphasize that we continue to have an active and constructive dialogue with Volvo Cars about the future of Novo Energy," writes Northvolt's press chief Erik Zsiga in an email to TT.
"We will not comment on specific amounts and contractual terms regarding the ongoing discussions," he adds.
Has invested three billion
Volvo Cars has so far invested "nearly three billion kronor" in Novo Energy, according to Boldemann Wester on Volvo Cars.
When the withdrawal from Northvolt is complete, Volvo Cars will review future scenarios to protect its investment in Novo Energy, according to the car manufacturer. Several alternatives are being evaluated, but a third party or another partner is needed for battery production to take place.
The launch of new Volvo Cars models will not be affected by the problems with Novo Energy and Northvolt, according to the car manufacturer, whose stock falls by over 1 percent after the announcement – slightly more than the Stockholm stock exchange as a whole.
The construction of the Novo Energy factory adjacent to Volvo Cars' car factory in Torslanda began in the spring, and in March, the goal was to increase the workforce from 250 to 500 by the end of the year. Currently, there are 400 employees – whose future is uncertain.
When the Novo Energy project was launched by the owners Volvo Cars and Northvolt, the goal was to build a factory with 3,000 employees and start production in 2025, which would cost 30 billion kronor to build.
The production capacity was initially stated to be cells equivalent to up to 50 gigawatt-hours, which would be enough for batteries for half a million electric cars per year.
