This news of Northvolt winding down it's lithium-metal R&D subsidiary, Cuberg, in California and shifting R&D to Sweden, is a real blow blow to the almost 200 employees working there, just 3 years after it's acquisition. 

The company has cited strategic reasons to consolidate R&D and industrialization efforts locally, but it's hardly surprising given the challenges the European battery giant has faced this past 12 months. 

Firstly, I am full of admiration for Northvolt. The company has been and still is a shining light for battery production in Europe, and the sheer scale of it's growth has been staggering… but even with $20Bn of total investment, its been far from straight forward so far. 

They have faced production scaleup challenges with their flagship Ett plant in Sweden, operating losses tripling to $1.03Bn in FY2023 results, various complaints of output delays, concerns over workplace safety, and then in June, the headlines that BMW cancelled their €2Bn supply order with Northvolt.

It's certainly been a whirlwind for the company, but its also indicative of how complex and challenging scaling a battery producer really is, particularly in Europe. 

EV market sales are down on projected levels, meaning there has been a ripple effect for many key EV battery suppliers, with Northvolt no different. Revenues have been hit and there have been increased competition from Chinese LFP players which then puts huge pressures on margins. Additionally, costs of building and operating plants have never been higher with energy and materials prices and workforce challenges.

Northvolt have already shelved plants for a proposed Cathode Active Materials (CAM) plant in Sweden, have slowed down international Gigafactory plans, and this latest move with Cuberg could be attributed to cost reductions. As recruiters, we know the compensation levels for US West Coast and in particular California, and with a 200-strong workforce in this expensive region, this move was probably seen as a necessary evil. 

All in all, it's turbulent times and I am hopeful that Northvolt can navigate their way through the storm and flourish over the next few years. The industry, particularly here in Europe, needs a healthy Northvolt as a leader to follow. 

I also hope all the Cuberg employees affected can find new positions, whether that be remaining in wider Northvolt entities or outside. We support many innovative battery startups and scaleups internationally, so if you're reading this and you're affected, then get in touch to see how we might be able to help!

It just goes to show what all battery companies face once they go beyond early commercialisation and scale to multi-site, mass production phase!

Hyperion supports battery and energy storage startups and scaleups to build their leadership and senior teams, during commercialisation and ramp up phases. In an increasingly challenging environment, it's critical that you hire the right people to lead your business, and that's where we've excelled for the past decade. If you'd like to discuss how we can support your scaling challenges, get in touch at david.beeston@hyperionsearch.com