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Swedish EV battery maker Northvolt has reached an agreement with Volvo Cars to sell its stake in their Swedish battery-making joint venture, Novo Energy.
The two companies will also explore potential collaborations in North America.
Northvolt, currently under US bankruptcy protection, stopped funding most of its joint ventures, including Novo, throughout 2024 to prioritise its core business of battery cell production.
As a result, Volvo found Northvolt in breach of contract in October and announced it would acquire Northvolt’s stake in Novo.
Neither company has disclosed the financial details of the transaction, and the sale must be approved by a US bankruptcy court.
This sale is part of a broader strategy by Northvolt to divest projects and businesses, including those in Poland and Norway, to cut costs and focus on its battery plant in northern Sweden.
Volvo Cars is set to take full ownership of Novo Energy which is engaged in developing and producing advanced batteries specifically for Volvo vehicles.
Founded in 2022, Novo Energy established an R&D center in Gothenburg, Sweden to enhance battery technology and vehicle integration.
Novo commenced work on its first gigafactory in 2023. The facility will have a capacity of up to 50 GWh per year.
Volvo said the latest deal is not anticipated to affect its other planned investments or cash flow goals.
The completion of the deal will settle any outstanding claims between Volvo Cars and Northvolt.
Northvolt's sale is part of its broader strategy to offload projects to reduce costs, and concentrate on its battery plant in Sweden and planned gigafactories in Germany and Canada.
The company is seeking new investors and funding to maintain operations beyond February, reported Reuters.
As part of cost-cutting measures, Novo announced a 30% reduction in its workforce earlier this month.
"Northvolt to divest stake in battery venture to Volvo" was originally created and published by Just Auto, a GlobalData owned brand.
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