Swedish automaker Volvo Cars said on Tuesday it was halting operations at an under-construction battery factory and laying off all 75 employees there after failing to find a partner for the company.
Volvo Cars, majority-owned by Chinese conglomerate Geely, last year took full control of NOVO Energy, a subsidiary it previously shared with Northvolt, a battery maker that went bankrupt in March.
Northvolt’s failure, one of the biggest in Swedish corporate history, highlights the difficulties for EU battery makers facing high costs and Chinese competition.
Last month, the European Commission said it would provide 1.5 billion euros ($1.76 billion) to support the bloc’s battery makers through interest-free loans.
Founded in 2021, NOVO Energy would build a mega battery factory that would supply Volvo Cars and Geely-owned Polestar.
But the company needs an external technology partner, which Volvo says it has been unable to find after a search launched last year.
“Until a new technology partner is found, NOVO Energy can no longer continue its activities as previously planned,” Volvo Cars said. “As a result, NOVO Energy AB today announces redundancies that will affect all positions in the company.”
Volvo Cars said it maintains its “long-term ambition to produce batteries for its electric cars in the Gothenburg region, Sweden”.
But it said it was not possible to say when battery production might start, “or under what organizational structure this might happen”.
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