Volvo Cars has announced its intention to fully acquire Novo Energy, the battery cell joint venture it established with Swedish battery manufacturer Northvolt. The decision comes after Northvolt did not meet its financial obligations as outlined in the shareholders’ agreement.
In a brief statement, Volvo Cars confirmed that it informed Northvolt of its plan to exercise its buy-back rights for Northvolt’s shares in Novo Energy. “This action follows a breach of the parties’ shareholders’ agreement where Northvolt AB has not fulfilled its financing obligations,” the company stated. Volvo Cars expressed its desire to engage in “a constructive dialogue with Northvolt on the matter.”
Recent reports have highlighted financial challenges at Northvolt. The company is reportedly close to securing a rescue financing round of $300 million, which may conclude soon. These financial difficulties have affected Northvolt’s ability to meet agreed payments and investments related to Novo Energy.
The future of Novo Energy is now uncertain. Volvo Cars is exploring “future scenarios to protect the investment.” Established in 2022, the joint venture aimed to produce battery cells for Volvo’s electric vehicles and potentially for other brands within the Geely group. Construction of a battery cell factory in Gothenburg began in September 2023, with a planned capacity of up to 50 GWh.
Despite the situation, Volvo Cars clarified that it does not plan to undertake battery cell production alone. “Any battery production at Novo Energy is dependent on third-party or other partner involvement,” the company noted. It also acknowledged that the facility under construction “could be multifunctional,” leaving room for alternative uses if battery production does not proceed. All future plans hinge on Volvo Cars obtaining full ownership of Novo Energy.
Originally, battery cell production was scheduled to start in 2026, supplying Volvo’s electric vehicles. With the current developments, production—if it continues—will involve a new partner and may face delays. However, Volvo Cars emphasized that it maintains a “diversified and resilient battery supply chain,” assuring that its vehicle launch timelines “will not be affected.”
Source: Electrive, Volvo Cars
