Swedish battery maker Northvolt said it remains “committed” to large-scale battery-cell manufacturing at its $7-billion Montreal-area gigafactory project, as it announced plans to cut jobs globally and sell one of its battery-material units after completing the first phase of its strategic review. 

Northvolt said it will advance its strategic review in the coming weeks and indicated that “potential revisions” to its plans in Canada and further cost-cutting could be confirmed this fall. 

The company is in line to receive billions in funding from Canadian governments and investors. But it has become one of the highest-profile EV tech companies to knuckle under internal struggles as its automaker clients slow down electric vehicle plans. 

Here’s what Northvolt’s strategic review revealed.

What we know: 

• Northvolt cancelled plans for a battery components plant in Borlänge, Sweden, which would have made cathode-active materials. A similar plant at its flagship site in Skellefteå, Sweden, is also being placed into “maintenance” mode until further notice as Northvolt opts to focus on large-scale cell manufacturing.
• In Poland, the company is seeking partners and investors to secure the future of the energy-storage battery plant it opened in 2023. 
• Jobs will be cut, though Northvolt didn’t say how many or where. 

What we don’t know: 

• Will Northvolt forge ahead on its cathode and recycling businesses, given its cuts elsewhere? The Montreal-area plant was originally expected to hire up to 3,000 workers and include recycling and cell- and cathode manufacturing. In a statement, Northvolt spokesperson Emmanuelle Rouillard-Moreau said that it’s continuing construction on its battery-cell plant during the review, and continuing to design the cathode-active material and recycling factories. 
• Will Northvolt’s ongoing pullback affect the billions in investments promised by both the company and Canadian governments? Rouillard-Moreau said Northvolt’s $4.3-billion contribution to the $7-billion plant “remains the same,” and that the only public investment it has received so far is a loan from the province to buy land. It hasn’t gotten any of its $1.34 billion in federal funding, which is “conditional on the project’s progress through different phases,” Rouillard-Moreau said. 

Outgoing Quebec innovation minister Pierre Fitzgibbon said the province has rigorous protections on its investment. Specifically, Quebec’s $240-million loan to Northvolt was secured by the land on which the facility is being built. The province could sell that land for the same amount should Northvolt go bankrupt. 

• Will the Montreal plant open on time? The Financial Times, citing unnamed Northvolt executives, reported that the Canadian and German plants, and a joint venture with Volvo, will be delayed, but the firm hasn’t disclosed any details. 

The takeaway: Institutional investors will be watching Northvolt’s strategic reviews closely, with the next update for its NOVO plant in Sweden, as well as its German and Canadian plants, expected by the end of autumn. With backers including Bank of Montreal, Caisse de dépôt et placement du Québec, Investment Management Corporation of Ontario, Canada Pension Plan Investment Board and Ontario Municipal Employees Retirement System, any further cuts from Northvolt will have a widespread impact.