COPENHAGEN (Reuters) -Volvo Cars’ Novo Energy said on Monday it will cut its workforce by 50% to reduce costs after evaluating its business in light of the bankruptcy of Sweden’s Northvolt, which originally co-owned the battery venture.

A spokesperson for Novo Energy said the company would cut 150 jobs across the organisation.

"Despite our best efforts to secure our business and an extensive ongoing search for a suitable new technology partner, the current economic challenges and market conditions have made it impossible to maintain our operations at the current scale," Novo Energy CEO Adrian Clarke said in a statement.

Northvolt and Volvo (OTC: VLVLY ) Cars initially formed Novo Energy in 2021 to build a dedicated battery factory in Gothenburg on Sweden’s west coast.

The joint venture already in January launched cost-cutting measures, including cutting 30% of its staff.

Novo Energy said on Monday that producing batteries with a new technology partner in the Gothenburg area of Sweden remained its primary long-term objective.

It would continue limited operations while finalising the first phase of construction and continue to explore potential future scenarios that could allow it to resume activities at scale.

Volvo Cars in February agreed with Northvolt to take over its 50% stake in Novo Energy, which included a planned Gothenburg battery cell factory, paying only a token sum.

Northvolt, once considered Europe’s best hope for a battery champion, filed for bankruptcy in March.