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The European battery leader Northvolt is scaling back plans to manufacture battery chemicals and will focus instead on producing finished battery cells. The company’s retrenchment because of slow growth in electric vehicle sales follows similar decisions at other battery players, such as BASF and Umicore.
Northvolt is closing its cathode material plant in Sweden, canceling plans for a second plant in the country, and laying off workers. The firm says construction of a Canadian battery cell plant and design work for cathode and recycling plants in Canada will continue.
In August, Northvolt also closed down Cuberg, the US lithium-metal battery start-up it acquired in 2021, and moved its lithium-metal research to Sweden.
Northvolt is continuing a strategic review of its business and could streamline further. But CEO Peter Carlsson says he still believes that the long-term outlook for the battery industry is promising. “There remains no question that global transition towards electrification . . . is strong,” he says in a press release.
The changes are a big shift for Northvolt—the firm secured a $5 billion loan to expand cathode and cell production in Sweden earlier this year—but are in line with industry trends.
BASF says it will build battery material plants only after securing long-term agreements with customers. The firm decided not to invest in an Indonesian nickel refining project and has delayed a recycling project in Spain. Umicore paused construction on a cathode material plant in Ontario and is delaying a European recycling project.
Evelina Stoikou, a battery industry analyst with the research firm BloombergNEF, says Northvolt faced a particularly challenging road because it was trying to scale up both battery chemicals and cells while also pursuing next-generation technology like lithium-metal and sodium-ion batteries.
“Everyone is feeling the pressure,” Stoikou says. “It makes sense to narrow down on the area that you think is going to be the most successful.”
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