Volvo Cars takes full control of Novo Energy and eyes U.S. expansion

Novo Energy was established in 2022 as a joint venture between Volvo Cars and Northvolt to produce high-performance batteries for Volvo’s next generation of electric vehicles.

The new ownership deal, which will see Volvo Cars take full ownership of the Gothenburg-based battery company is contingent on approvals from both a US bankruptcy court and Sweden’s Inspectorate of Strategic Products (ISP), Northvolt stated in a press release.

Future collaboration on the horizon

Despite the ownership shift, Volvo Cars and Northvolt are keeping the door open for future cooperation. The two companies have signed a framework agreement outlining potential future partnerships, particularly in North America, including possible supply deals.

Financial stability

Volvo Cars, owned by China’s Zhejiang Geely Holding Group, emphasised that the acquisition will not affect its planned investments or cash flow targets.

“Upon completion of the transaction, there are no outstanding claims between the companies,” Volvo Cars stated in a press release.

Novo Energy is building a large-scale battery plant in Gothenburg, Sweden, which aims to supply Volvo’s European production network. The factory is expected to create thousands of jobs and play a key role in Volvo’s push towards an all-electric future.

Northvolt has faced significant financial challenges in recent months, filing for Chapter 11 bankruptcy protection in the U.S. in November 2024. Following the filing, co-founder and CEO Peter Carlsson resigned, although he remains on the board as a senior adviser. Northvolt is reportedly trying to raise between $1 billion and $1.2 billion (€955 million to €1.15 billion) to restructure and continue its operations.

Additional research by Maddy Savage