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STOCKHOLM, Sept 13 Reuters Northvolt39;s shock decision this week to shrink its operations and cut jobs has sparked fears that Europe39;s best shot at a homegrown electric vehicle battery champion may stall, sector experts and people familiar with the situation told Reuters.

Struggling with order delays and the loss of a 2 billion BMW contract in June, CEO and exTesla executive Peter Carlsson said on Monday the company he cofounded in 2016 would stop producing cathode active material CAM a crucial battery component scrap plans for a Swedish facility and seek investors for a plant in Poland.

The Swedish company said it will focus on its core business of making battery cells, the units that store chemical energy.

The decision effectively means Northvolt, Europe39;s most developed battery player, has stepped back from its original mission to be an allinone shop offering everything from material production and battery making to endoflife recycling.

Coming just as former European Central Bank head Mario Draghi warned of green tech competition from China in a long awaited report, the announcement raises questions about…