Core Viewpoint - NOVO Energy, a subsidiary of Volvo Cars, is initiating a deep restructuring plan, including a 50% workforce reduction and organizational streamlining, to address operational pressures from the bankruptcy of its key supplier Northvolt and weak market demand [1][4]. Company Summary - The restructuring is described as a "desperate measure" following a comprehensive assessment of business sustainability after Northvolt's bankruptcy, with the company planning to maintain limited operational capabilities while completing the construction of its first factory [4]. - The layoffs will affect approximately 50% of the global workforce, impacting R&D, production, and supply chain departments, while retaining only key technical teams and operational staff for the first factory [4]. - The first battery factory in Skellefteå, Sweden, is 80% complete, with a revised production capacity reduced from 15 GWh to 5 GWh, which will only meet part of Volvo's model requirements [4][5]. Industry Summary - NOVO Energy's challenges are closely linked to Northvolt's collapse, which halted the joint development of solid-state battery technology and jeopardized €230 million in R&D investments [4]. - The European battery industry is facing a crisis, with a 22% year-on-year decline in installed capacity in Q1 2025, and local companies' market share dropping to 18% due to competition from Asian manufacturers like CATL and LG Energy [5]. - European battery firms are grappling with three main challenges: reliance on imported key materials, high energy costs (30%-50% higher than in Asia), and delayed technological advancements, particularly in solid-state battery production [5]. - NOVO Energy's "limited operation" strategy may become a common approach for second-tier European battery companies to survive [5][6].