On January 13, 2026, Volvo Cars announced a temporary operational pause at NOVO Energy, its wholly owned battery venture, as it continues the search for an external technology partner. This move is part of Volvo Cars’ long-term strategy to develop in-house battery cell production capabilities for its electric vehicles in the Gothenburg, Sweden region.
Over the past year, Volvo Cars has led an extensive process to identify a partner with the required expertise in battery cell technology and manufacturing. Securing such a partner is considered essential for NOVO Energy to advance from planning into full-scale production. Until an agreement is finalized, NOVO Energy will halt ongoing site preparations and related activities.
As a result of the pause, NOVO Energy AB has initiated layoff procedures affecting all 75 positions within the organization. The company has formally notified the relevant labor unions and Swedish employment authorities (Arbetsförmedlingen) of the workforce reductions. Volvo Cars emphasized that the decision was made after thorough evaluation of the current situation and extends its sincere gratitude to the affected employees for their dedication and efforts to date.
Volvo Cars noted that further information regarding the timeline for battery cell production, as well as the future organizational structure of NOVO Energy, will be shared once a technology partnership is secured and project plans are finalized. The company remains committed to its ambition of establishing a local battery supply chain, which it views as critical to ensuring production resilience and supporting its broader electric vehicle roadmap.
Volvo Cars continues to lead the partner search and aims to provide an update when there is greater clarity on technology collaboration and project milestones.
Source: Novo Energy press release
