A wave of layoffs hits EV battery companies

It’s been a tough few weeks for workers at next-gen and traditional EV battery companies, with hundreds of employees in the US and Europe losing their jobs. Call it new industry growing pains: Companies are struggling to bridge the gap between early-stage products and the high-volume production that will be needed down the line, reports The Information. Battery makers also are looking to save cash as costs surge and investors move their funding to less risky prospects.

Earlier this week, we covered Michigan-based EV battery startup ONE, Our Next Energy, cutting its workforce by 25% as part of a “revised business plan,” according to the company. The company, headquartered in Novi, a suburb of Detroit, announced that it has cut 128 salaried and hourly workers from its staff of roughly 500 people. The company kept the reasoning succinct, noting that the decision was “in response to market conditions.” 

South Korea’s LG Energy Solution, which supplies batteries to Tesla and GM, laid off 170 workers last week at its Michigan plant, up to 10% of its staff. Ford supplier SK On has also laid off more than 100 workers at its plant in Georgia in September, as has Ford, which last month laid off 700 workers while scaling back production of the F-150 Lightening pickup. SK On also plans to delay the launch of its second plant in Kentucky, which is a joint venture with Ford and expected to be up and running by 2026. 

Another next-gen player, Freye Battery, also laid off 78 staff members from plants in Norway and Georgia, and Enovix slashed 185 workers in Fremont, California, from its payroll, moving those operations to Malaysia. Freyr also saw the loss of its COO, Jan Arve Haugan, who resigned last week.

Companies are struggling to “bridge a gap between current early-stage products and high-volume production later this decade,” The Information says. Large battery makers are dependent on actual EV sales to increase production, while next-gen battery makers are often still in pilot mode or have yet to ramp up any of their early-phase products and won’t be doing so for years to come.

ONE, for example, is one of many such companies in the US working on manufacturing LFP battery cells and developing a domestic battery supply chain to benefit from President Biden’s Inflation Reduction Act. Led by former Apple executive Mujeeb Ijaz, ONE is now delivering prototype versions of lithium iron phosphate battery packs to several companies for testing, with the aim of producing battery cells next year at a new $1.6 billion factory in Van Buren Township, Michigan. But it needs a lot of cash to make this happen.

Even Tesla has hinted at delaying plans for its Giga Mexico, with CEO Elon Musk saying in its Q3 earnings call that he wanted “to just get a sense for the global economy is like before we go full tilt on the Mexico factory. I am worried about the high-interest rate environment that we’re in.”