January 23, 2026: Volvo Cars has announced an “operational pause” for its battery start-up, NOVO Energy, halting operations while it continues the search for a technology partner.

Volvo said on January 13 its long-term ambition continued to be the production of NOVO batteries for its electric cars in Sweden.

However, a year-long search for an external technology partner continues. This means NOVO cannot proceed with operations at this stage. As a result, NOVO has announced layoffs.

“This decision has not been taken lightly but is necessary considering the current situation,” Volvo said.

NOVO was originally established as a joint venture with Swedish battery maker Northvolt and was fully acquired by Volvo in January 2025. In March 2025, Northvolt confirmed it had filed for bankruptcy in Sweden.

Last March, Volvo’s venture capital arm became a key investor in Swedish sodium ion battery developer Altris.

The undisclosed investment by Volvo Cars Tech Fund was made in Altris’ B1 funding round. Volvo Cars will also collaborate on product development for potential new battery energy storage systems.