Northvolt scraps CAM gigafactory plans, seeks partners for storage business in Poland

Swedish battery maker Northvolt is pausing its cathode active material production plans in Sweden and selling one site in Sweden. It is also seeking partners and investors for its energy storage business based in Gdańsk, Poland.
Image: Northvolt

Europe’s leading battery manufacturer Northvolt has embarked on a strategic review of its operations and announced the resizing of its workforce citing a challenging macroeconomic environment.

Following a series of setbacks, the group said on Monday that it has agreed to sell its Kvarnsveden site in the municipality of Borlange, central Sweden, which it acquired in 2022 and where it had planned to repurpose a former paper mill and the surrounding area into a cathode active materials (CAM) factory.

The facility — known as Northvolt Fem — was planned to start its operations in late 2024 and produce more than 100 GWh of cathode material annually, when fully built out.

The Borlange municipality said on Friday that it will pay SEK 500 million ($49 million) for the site, of which a third would be sold on to a company with plans to build a facility for data centers.

In addition, Northvolt said it will pause operations at its Northvolt Ett Upstream 1 cathode active material production facility 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,” the group said.

Northvolt Ett is the manufacturer’s first lithium-ion gigafactory, where it produced first battery cells fully designed, developed, and assembled by a homegrown European battery company in December 2021. In January, Northvolt raised $5 billion of debt financing to help it expand Northvolt Ett to up to 60 GWh of annual output capacity, in addition to building a recycling facility on the same site. The deal represents the largest green loan in Europe to date.

Furthermore, Northvolt announced that it is seeking partners and investors for its Northvolt Systems unit in Gdańsk, Poland, where it assembles battery energy storage system modules and packs. This includes Northvolt Dwa, Europe’s largest battery systems production facility, which opened in 2023 with a production capacity of 5 GWh and plans to scale to 12 GWh annually.

Northvolt has already communicated its intention to shut down its subsidiary Cuberg in California, in the US, and shift development of its next-generation lithium-metal battery technology to Northvolt Labs, Sweden.

The group, backed by Volkswagen, Goldman Sachs, Siemens, and BlackRock, also said that its cost-saving plan would “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, currently at 7,000 workers.

“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,” said Peter Carlsson, CEO and co-founder of Northvolt. “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.”

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  • Marija has years of experience in a news agency environment and writing for print and online publications. She took over as the editor of pv magazine Australia in 2018 and helped establish its online presence over a two-year period.

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