An electric car factory owned by a top European car manufacturer has closed, with dozens of jobs set to be axed. Operations at NOVO Energy, a battery start-up company owned by Swedish manufacturer Volvo Cars is set to cease.
According to NOVO Energy, Volvo requires an external technology partner to produce batteries for its electric cars at the factory. They confirmed that Volvo had conducted an extensive search for a new partner over the past year but have so far failed to strike a deal. They stressed that NOVO Energy can no longer proceed with its operations until a new technology partner is found.
According to NOVO, the decision will see the loss of 75 positions in the latest blow to Europe's car manufacturing sector.
NOVO Energy said: “As a result, NOVO Energy AB today announces layoffs that affect all positions in the company. NOVO Energy has informed relevant unions and has given notice to Arbetsförmedlingen, the Swedish labor market authorities, for a total of 75 positions.
“This decision has not been taken lightly but is necessary considering the current situation. The company and its owner Volvo Cars sincerely thank all employees for their efforts in bringing NOVO Energy to where it is now.”
It's the second blow for NOVO staff in recent months after the workforce was already cut back in the Spring. In May, NOVO confirmed it would cut its workforce by 50% to reduce costs after evaluating the future of the business. Over the Spring, the company said that 150 jobs from across the business would be lost.
NOVO added: “While Volvo Cars continues to search for a new technology partner, it is currently not possible to share further details about when battery production could start, or in what organisational structure this might happen.”
It's the latest blow to the EU’s faltering car sector, with several companies confirming job losses at the start of 2026. Industry journal Automotive News Europe claimed the sector could expect a “wave of redundancies” in the new year, with predictions proving right.
The German car industry is the most affected, with thousands of jobs set to be cut in the coming months. In late 2025, motoring supplier Bosh confirmed plans to axe 13,000 jobs, while ZF Friedrichshafen is set to cut around 7,600 roles in its EV drivetrain division.
