EV battery startup Our Next Energy lays off a quarter of its staff

Electric vehicle battery startup Our Next Energy has laid off a quarter of its staff in “response to market conditions,” the company said Monday.

The suburban Detroit battery manufacturer slashed its salaried and hourly work force by 128 employees in a move to “focus on core priorities.” Eighty-two of the layoffs were in Michigan.

“While decisions that impact our colleagues are always difficult, these actions position ONE for future growth and delivering on its mission, including continuing to establish its gigafactory (ONE Circle) in Michigan and to develop a North American supply chain for batteries,” the company said in a statement.

The layoffs come on the heels of Our Next Energy launching production of its lithium iron phosphate battery cells at a plant near Detroit in Van Buren Township, Mich., where the company said it would invest $1.6 billion and create 2,112 jobs.

Michigan Economic Development Corp. said the job cuts are not expected to impact the $237 million incentives package approved for the project. The state's deal with the company includes provisions allowing it to claw back grant money should Our Next Energy fail to meet job creation requirements.

“At this time, they remain on track to meet their milestones required for disbursement at the existing project scope,” Michigan Economic Development Corp. spokesman Otie McKinley told Crain's Detroit Business, an Automotive News affiliate, in an email.

“ONE remains committed to the Michigan Gigafactory as evidenced by our recent announcement of pilot production and [we] continue to invest accordingly to scale production,” the company said.

Fundraising efforts also continue, according to Our Next Energy. The company announced in February that it had raised $300 million in its Series B funding round. The investments valued Our Next Energy at $1.2 billion. Deeana Ahmed, chief strategy officer for Our Next Energy, said in September that the company had started its Series C fundraising to build a second plant.

The job cuts by Our Next Energy mark more bumps in the road for the EV transition. Ford Motor Co. announced last week it would reduce the size of its planned battery plant in Marshall, Mich., by 40 percent, with 800 fewer jobs than initially planned. Ford said the move was in response to slower than anticipated demand for EVs, which General Motors acknowledged in October when it pushed back EV production launches at its Orion Assembly plant in Michigan.

Our Next Energy was founded as a manufacturer of lithium iron phosphate batteries for the automotive industry, but it has moved much more aggressively into energy storage, where it can get to market faster than it can with EV batteries.