Northvolt's Strategic Shift: Divestment and New Horizons with Volvo

Northvolt, a Swedish battery maker under bankruptcy protection, is selling its stake in Novo Energy to Volvo Cars, ceasing joint ventures to focus on battery cell production. Northvolt seeks new investors and explores North American supply opportunities while Volvo plans to proceed with the Gothenburg factory.

In a bold strategic move, Swedish electric vehicle battery maker Northvolt announced on Wednesday its decision to divest its stake in Novo Energy to Volvo Cars. The decision comes amidst Northvolt's struggle under U.S. bankruptcy protection and its broader plan to refocus on core business operations.

The divestment marks another step in Northvolt's series of sell-offs, aiming to cut costs and concentrate efforts on its flagship battery plant in northern Sweden, with anticipated expansions in Germany and Canada. Additionally, Northvolt is on a quest for fresh investors as it faces a cash reserve depletion by February.

Volvo Cars, in response to Northvolt's withdrawal from joint ventures, intends to maintain its ambitious timetable for the Gothenburg battery factory, targeting production by 2026. In the meantime, both companies are exploring supply opportunities in North America, signifying enduring market interest despite Northvolt's ongoing challenges.

(With inputs from agencies.)