[Source/Observer Network, Pan Yuchen, Editor/Gao Shen] Following the bankruptcy of Northvolt, once Europe's largest battery manufacturer, European automakers' joint ventures with the company are suffering severe setbacks.

According to a report by Reuters, on May 5th local time, Novo Energy, a joint venture between Volvo Cars and Northvolt, stated that due to Northvolt's bankruptcy, after assessing its business, it would lay off 50% of its workforce, or 150 jobs, to reduce costs.

Volvo Reuters

Adrian Clarke, CEO of Novo Energy, said that despite the company's best efforts to maintain business continuity and actively seek suitable new technology partners, current economic challenges and market conditions have made it impossible for Novo to sustain its current scale.

In 2021, Northvolt established the equally held Novo joint venture with Volvo Cars and began construction of a battery factory in Gothenburg, Sweden. However, as Northvolt fell into difficulty, Novo announced a series of cost-cutting measures in January this year, including laying off 30% of its employees.

In February, Volvo acquired half of Novo's shares held by Northvolt at a symbolic price and became the sole owner of Novo; In March, Northvolt, once seen as Europe's greatest hope to counter Asian battery suppliers, officially filed for bankruptcy.

Håkan Samuelsson, CEO of Volvo, stated in April that the construction of the Novo battery plant was nearing completion, but the battery production equipment had not yet been moved in.

Novo stated that while completing the first phase of the factory construction, it would continue limited operations and explore possible solutions to restore large-scale operations in the future. Its main long-term goal remains to produce batteries together with Volvo. A spokesperson for Volvo said that the company’s goals were aligned with Novo's, but declined to provide further details.

Volvo has also faced certain difficulties recently. In the first quarter, Volvo's global net sales amounted to SEK 121.8 billion (approximately RMB 91 billion), a decrease of 7%; operating profit was SEK 13.3 billion (approximately RMB 10 billion), a decrease of 27%.

Fredrik Hansson, CFO of Volvo, predicted that the company would not make any significant investments in the short term. Samuelsson reiterated that Volvo still needs technical partners but also needs to share the plant with other brands under the parent company, Geely Holding Group.

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Original article: https://www.toutiao.com/article/7501176767009554994/

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