Volvo Novo Energy Closure: Battery Factory Paused, 75 Jobs Cut

If you’ve been following Volvo’s electrification journey, you might have noticed a troubling sign: the company’s ambitious battery venture has hit a wall. On January 13, 2026, Volvo Cars paused operations at its NOVO Energy battery startup and cut 75 jobs, according to Electric Vehicles (EV news site).

Pause announcement date: January 13, 2026 ·
Jobs cut: 75 ·
U.S. sales decline (2025): 32% ·
New partner search: Ongoing ·
Volvo Cars owner: Geely Holding (China)

Six key facts about the NOVO Energy situation, one pattern: the venture was meant to secure Volvo’s battery supply, but the collapse of its partner Northvolt forced a full ownership takeover and ultimately a pause.

Why is Volvo struggling?

What caused Volvo’s U.S. sales crash?

• Volvo’s U.S. sales fell 32% in 2025, with dealers pointing to an aging lineup, according to a YouTube video report (industry analysis).
• The drop reflects a broader challenge for legacy automakers as EV adoption slows and competition intensifies.

Volvo Cars’ broader restructuring in 2026 includes 3,000 job cuts, mostly in Sweden, tied to an 18 billion Swedish kronor cost-cutting plan, as reported by Automotive Manufacturing Solutions (manufacturing industry news). The NOVO Energy pause is part of that belt-tightening.

How does the NOVO Energy pause affect Volvo?

• The Gothenburg battery facility, which began construction in March 2024 and was planned to produce up to 50 GWh annually, is now on hold (EV Infrastructure News).
• Volvo previously laid off 150 employees at NOVO Energy in January 2025, and the workforce was halved again in May 2025, according to Electric Vehicles (EV news site).
• The pause leaves Volvo without an in-house battery cell production line, forcing reliance on external suppliers for its EV models (Battery Tech).

The pattern: Volvo’s struggles are a cascade — weak sales forced cost-cutting, which killed the battery venture, which in turn threatens its EV competitiveness.

Is Volvo now Chinese owned?

Who owns Volvo Cars?

• Volvo Cars is owned by Geely Holding, a Chinese automotive group that acquired the company from Ford in 2010 (Automotive Manufacturing Solutions).
• Geely also owns Polestar, Lynk & Co., and holds stakes in other carmakers.

Is Volvo still Swedish?

• Volvo remains headquartered in Gothenburg, Sweden, and operates as a separate subsidiary under Geely.
• The brand identity and engineering teams are still largely based in Sweden, but ownership and strategic direction sit in China.

What this means: The Chinese ownership gives Volvo access to capital and the Chinese market, but the NOVO Energy pause shows that Geely is not immune to the same global battery supply chain pressures as Western automakers.

Where Are Volvo Cars Made?

Which countries have Volvo factories?

• Volvo has manufacturing plants in Sweden (Gothenburg), Belgium (Ghent), China (Chengdu, Daqing, Luqiao), and the United States (Charleston, South Carolina), according to Automotive Manufacturing Solutions.
• The U.S. plant in Charleston produces the S60 and the EX90 electric SUV.

Where are Volvo EVs made?

• EV models such as the XC40 Recharge and C40 Recharge are produced in Ghent, Belgium, and the EX90 is built in Charleston, USA.
• China plants also produce EVs for the domestic and export markets.

Why this matters: The NOVO Energy factory in Gothenburg was meant to supply cells for European EV production. Without it, Volvo’s European factories will continue relying on third-party batteries, which may affect cost and supply certainty.

Which country buys the most Volvos?

What are Volvo’s top markets?

• China is Volvo’s largest market, followed by the United States and Sweden, according to industry analysis (YouTube).
• Volvo sold around 175,000 vehicles in the U.S. in 2024, but the 32% drop in 2025 means roughly 119,000 units — a significant loss in its second-biggest market.

How many Volvos were sold globally in 2025?

• Volvo Cars sold 763,389 vehicles globally in 2024, according to company reports. Full-year 2025 data is not yet published, but the U.S. decline and Chinese market slowdown suggest a drop.

The pattern: Volvo’s reliance on China and the U.S. makes it vulnerable to trade tensions and regional demand shifts. The NOVO Energy pause doesn’t directly affect sales, but it raises questions about Volvo’s ability to meet EV targets in those markets.

Is Volvo leaving Polestar?

What is Volvo’s new stance on Polestar?

• Volvo Cars will stop funding its electric performance brand Polestar, as part of the cost-cutting plan (Automotive Manufacturing Solutions).
• This ends the direct financial support that Volvo provided to Polestar since its spin-off.

Will Volvo continue collaborating with Polestar?

• Volvo and Polestar will continue engineering and technology collaboration, despite the funding cut (EV Infrastructure News).
• The two brands share platforms and R&D, so some cooperation will persist.

The trade-off: Volvo sheds Polestar’s financial drag but keeps access to its platform and brand cachet. It’s a pragmatic move that mirrors the NOVO Energy pause: cut spending now, hope for partnerships to fill the gap later.

Timeline signal

The following timeline captures key dates around the NOVO Energy pause.

Confirmed facts & what’s unclear

Confirmed facts

• Volvo Cars paused NOVO Energy operations on January 13, 2026 (Electric Vehicles)
• 75 jobs were cut (Battery Tech)
• Volvo is searching for a new technology partner (EV Infrastructure News)
• Volvo U.S. sales declined 32% in 2025 (YouTube video report)
• Volvo is owned by Geely Holding (Automotive Manufacturing Solutions)
• Volvo will stop funding Polestar but continue collaboration (Automotive Manufacturing Solutions)

What’s unclear

• Future of NOVO Energy — likely to be sold or restructured, but no official plan
• Whether Volvo will secure a new battery partner and when
• Impact on Volvo’s EV production timelines — company has not stated how long it can rely on external suppliers

Quotes

Until a new technology partner is secured, NOVO Energy can no longer proceed with its operations as previously planned.

— Volvo Cars spokesperson, in the official announcement (EV Infrastructure News)

Novo Energy could not share when battery production might start or what organizational structure it would have.

— Novo Energy representative, as reported by Electric Vehicles (EV news site)

Summary

Volvo’s decision to pause NOVO Energy is a strategic retreat from vertical integration, driven by weak U.S. sales and a broader cost-cutting program. The company now faces a race to find a new battery partner before its EV production plans stall. For Volvo, the choice is clear: secure a technology deal soon, or risk falling behind in the electric vehicle race.

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