Volvo Cars Pauses Novo Energy Battery Factory Operations Amid Partner Search

Volvo Cars has paused operations at Novo Energy, its battery manufacturing venture, on 13 January 2026. The company stated that operations cannot continue as previously planned until a technology partner is secured.

Novo Energy was established in 2021 as a joint venture between Volvo Cars and Northvolt AB. The project aimed to build a battery gigafactory in Gothenburg, Sweden, with a planned production capacity of 50 gigawatt-hours per year. Construction of the facility began in 2023. The factory was intended to supply battery cells to Volvo Cars manufacturing plants in Gothenburg and Ghent, Belgium, and potentially to other vehicles from Geely brands, including Polestar.

In March 2025, Northvolt declared bankruptcy, leaving Novo Energy without its technology partner for battery cell production. Volvo Cars took full ownership of Novo Energy later that year after invoking redemption rights to acquire Northvolt's shares. The company began cost-cutting measures in January 2025, laying off 150 employees, cutting every second position within the organisation.

The latest operational pause on 13 January 2026 results in the loss of 75 jobs across the company. Novo Energy stated: “Until a new technology partner is secured, Novo Energy can no longer proceed with its operations as previously planned.”

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Volvo Cars has reiterated its long-term goal to manufacture batteries for electric vehicles in the Gothenburg area. However, the timeline for resuming operations remains uncertain, and no new technology partner has been announced. The company is continuing its search for a suitable partner to enable large-scale manufacturing to proceed.

Source: Reuters