Volvo Cars Acquires Northvolt's Shares in Battery Joint Venture

COPENHAGEN (Reuters) – Volvo Cars announced on Wednesday that it will exercise its right to acquire Northvolt's shares in their Swedish battery joint venture, NOVO Energy, following Northvolt's withdrawal of funding.

This year, Northvolt transitioned from being Europe's foremost electric-vehicle battery candidate to struggling for survival through cost-cutting measures and layoffs, due to production challenges and funding shortages.

In 2021, Volvo (OTC:VLVLY) Cars, majority-owned by China's Geely, and Northvolt established a joint venture to construct a gigafactory for sustainable battery production in Gothenburg, Sweden.

The automaker stated, "Volvo Cars is evaluating any potential impact these developments could have for NOVO Energy and is investigating future scenarios to protect the investment."

NOVO, which aims for investments of 30 billion Swedish crowns ($2.8 billion), was designed to manufacture battery cells specifically for all-electric Volvo and Polestar (NASDAQ:PSNY) vehicles, with production anticipated to begin in 2026.

Polestar, also majority owned by Geely, announced it has no orders with Northvolt as it does not require Northvolt's battery types. Its CEO recently mentioned that the company is undergoing a strategic review after a 14% drop in third-quarter deliveries.

The future utility of the under-construction NOVO facility remains uncertain, according to Volvo.

Volvo noted, "Any battery production at NOVO Energy is dependent on third party or other partner involvement," and indicated that its vehicle roll-out plan will not be affected.

A NOVO spokesperson refrained from making comments.

Northvolt, in a separate release, stated it has decided to halt additional capital investments into NOVO Energy, opting to focus on its fully-owned cell operations. The company has reported that discussions with investors and lenders are ongoing to secure funding and that it has made significant progress towards a financing agreement.

Volvo Cars CEO Jim Rowan confirmed this month that the company will not invest further in Northvolt.

($1 = 10.6305 Swedish crowns)