The battery manufacturer Varta, which is struggling with high costs and order delays, is putting the construction of a factory for lithium-ion batteries for electric cars on hold for cost reasons.

This was said by the spokesman for the board, Markus Hackstein, on Tuesday when the quarterly figures were presented.

The new factory building for the battery called V4Drive will only continue after binding customer commitments.

This is part of a cost-cutting package that should bring in 40 million euros in the coming year.

However, the operation of the first series production plant will continue as planned and will provide the cells to fulfill the contract with a premium car manufacturer.

The first customer is reportedly Porsche.

At the end of last year, Varta commissioned a pilot plant for the high-performance battery cells, which charge particularly quickly.

Mass production was previously planned for 2023.

The investment volume for the construction of a two-gigawatt factory was estimated at up to 500 million euros.

In Nördlingen, Bavaria, most employees are to go on short-time work from December to the end of April 2023.

For around 500 employees, up to 80 percent of the work could be eliminated, the company said.

So far, 700 people have worked there, 200 of whom are temporary employees whose employment contracts will not be renewed.

At the headquarters in Ellwangen, northeast of Stuttgart, there are company holidays over Christmas.

A reduction in staff is initially not planned.

No dividend for the current year

Investments in the new product, together with higher costs for raw materials and delayed call-offs for large orders, are squeezing profits.

Overall, the group listed in the M-Dax achieved a loss of around 20 million euros from January to September compared to 75.9 million net profits in the same period last year.

In the current year, the company expects a drop in profits to 55 to 60 million euros.

The operating profit had amounted to 282 million euros in the previous year, in July Varta had still expected 200 to 225 million euros.

Annual sales are expected to fall to 805 to 820 million euros from 903 million euros in 2021. For the coming financial year, the company forecast a slight recovery to 850 to 880 million euros in sales and 90 to 110 million euros in operating profit.

At the same time, Hackstein's board of directors announced that there will probably be no dividends for the year that is coming to an end.

The company was once taken public by the Austrian billionaire and Varta supervisory board chairman Michael Tojner.

He controls the manufacturer through a Swiss conglomerate.

His net worth is estimated at $1.2 billion by Bloomberg.

In the afternoon, Varta's share certificate was in the red.

The paper fell by almost 3 percent to EUR 31.52.

The Management Board announced that it would pass on price increases to customers and also intend to reduce purchasing costs.

The company feels the bad economic situation and, above all, that consumers are reluctant to buy new electronic devices.

The group manufactures button cells for hearing aids and headphones.

A major customer is Apple, whose Airpods use Varta batteries.

In particular, consumers are reluctant to buy wireless headphones.

On the other hand, there has been increasing demand in the area of ​​household batteries and energy storage since the beginning of the crisis.