Volvo Cars and Northvolt have selected Gothenburg, Sweden to establish a new battery manufacturing plant which will commence operations in 2025 and complement the planned R&D centre that both companies announced in December as part of an investment of approximately SEK 30 billion.
The new plant and close ties with Northvolt will significantly strengthen Volvo Cars’ electrification strategy as the company aims to produce and sell only fully electric cars by 2030.
Construction of the plant will start in 2023 and it will produce state-of-the-art battery cells, specifically developed for use in next generation pure electric Volvo and Polestar cars. The plant will have a potential annual cell production capacity of up to 50 gigawatt hours (GWh), which would supply batteries for approximately half a million cars per year.
“Our battery cell partnership with Northvolt is key to our strategic ambitions in electrification,” said Håkan Samuelsson, Volvo Cars chief executive. “We are committed to becoming a leader in the premium electric car segment and selling only pure electric vehicles by 2030.”
“Establishing this gigafactory in Gothenburg is a decisive move, both to continue to transform one of the most dynamic automotive regions in the world, and to become the leading global supplier of sustainable batteries”, said Peter Carlsson, co-founder and CEO of Northvolt.
As sustainable production is a central tenet of the partnership between Volvo Cars and Northvolt, the plant will be powered by fossil-free energy with focus on driving renewable energy capacity in the region, and will integrate engineering solutions which prioritise circularity and resource efficiency.
“Our new battery plant will support our ambition to have a fully climate neutral manufacturing network and secure a supply of high-quality batteries for years to come,” said Javier Varela, head of engineering and operations at Volvo Cars. “Through our partnership with Northvolt we will also benefit greatly from an end-to-end battery value chain, from raw material to complete car, ensuring optimal integration in our cars.”
The partnership between Volvo Cars and Northvolt will focus on developing tailor-made batteries and vehicle integration concepts that give Volvo and Polestar drivers what they want, such as long range and quick charging times. Establishing deep vertical integration of battery development and production is important for Volvo Cars and Polestar, since the battery represents the largest individual cost component in an electric car, as well as a major part of the carbon footprint.