Volvo Cars, majority-owned by the Chinese conglomerate Geely, last year took full control of NOVO Energy, a subsidiary it had previously shared with Northvolt, a battery maker that went bankrupt in March.
Northvolt's failure, one of the biggest in Swedish corporate history, highlights the difficulties for EU battery producers facing by high costs and Chinese competition.
Last month, the EU Commission said it would provide 1.5 billion euros ($1.76 billion) to support the bloc's battery producers through interest-free loans.
NOVO Energy, founded in 2021, was to build a mega battery factory supplying Volvo Cars and Geely-owned Polestar.
But the business requires an external technology partner, which Volvo said it had failed to find after a search it started last year.
"Until a new technology partner is secured, NOVO Energy can no longer proceed with its operations as previously planned," Volvo Cars said. "As a result, NOVO Energy AB today announces layoffs that affect all positions in the company."
Volvo Cars said it maintained its "long-term ambition to produce batteries for its electric cars in the Gothenburg, Sweden, area".
But it said it was not possible to say when battery production could start, "or in what organisational structure this might happen".
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