Volvo and Northvolt are to open a joint research and development (R&D) center in Gothenburg, Sweden, which will become operational in 2022. The move will make Volvo one of the few automotive brands to have battery cell development and production as part of its end-to-end engineering capabilities.
The establishment of the facility in Gothenburg will be followed by the construction of a new manufacturing plant in Europe. This will produce battery cells specifically developed for use in next-generation pure-electric Volvo and Polestar cars. The exact location of the plant is expected to be confirmed in early 2022.
“Our partnership with Northvolt secures the supply of high-quality, sustainably produced batteries for the next generation of pure-electric Volvos,” said Håkan Samuelsson, chief executive for Volvo Cars. “It will strengthen our core competencies and our position in the transformation to a fully electric car company.”
Volvo says it is working with Northvolt to create a true end-to-end system for batteries, whereby it will develop and build the batteries itself. This deep vertical integration is important since the battery represents the largest individual cost component in an electric car, as well as a major part of the carbon footprint.
“Volvo Cars is an excellent partner on the road toward building up a supply of battery cells that are made in Europe with a very low carbon footprint, and that are optimized through vehicle integration to get the best performance out of the next-generation EVs,” added Peter Carlsson, chief executive of Northvolt.
As for their joint battery plant, Volvo Cars and Northvolt say they are in the final phase of a selection process to find a suitable location in Europe. The plant is planned to have a potential annual capacity of up to 50GWh, which would supply batteries for approximately half a million cars per year. Construction will begin in 2023, with large-scale production starting in 2026. The facility is expected to employ up to 3,000 people.