The battery industry is facing turbulence as shifting market conditions force companies to reconsider their strategies.
Factories once seen as key to the electric vehicle revolution are now struggling to adapt to changing demand and financial challenges.
Novo Energy, the battery factory owned by China’s Volvo Cars, is the latest to announce major layoffs.
The company plans to cut one-third of its workforce, affecting around 120 employees.
The decision follows Volvo’s takeover of the factory from Northvolt in October last year.
Negotiations with labor unions have started
In a press statement, Novo Energy cited "changing market conditions" and an "adjusted business plan" as the reasons for the layoffs.
Negotiations with labor unions have started, but the outcome remains uncertain.
Adrian Clarke, CEO of Novo Energy, described the move as difficult but necessary. "We do not take this decision lightly, but we must adapt to current market realities," he said.
The challenges at Novo Energy are part of a larger trend in the auto industry. Many companies are scaling back operations, facing financial strain, and struggling with lower-than-expected demand for electric vehicles.
Volkswagen, one of the biggest automakers in the world, has warned that it could run out of money within two to three years if financial losses continue.
To address this, the company plans to shut down several factories in Germany.
Other car brands have already succumbed to financial pressure. American automaker Canoo has announced its closure, leaving behind massive debts.
The company, which once aimed to revolutionize the electric vehicle market, now has less than $50,000 in remaining assets.
Fisker Inc., founded by Danish designer Henrik Fisker, is also struggling.
Consumer Reports recently named its Fisker Ocean model as the "worst car of the year," raising further concerns about the company’s future.
