The two firms, through a new JV, will invest $3.3bn for developing and manufacturing sustainable batteries
Volvo Cars, Northvolt formally join forces to develop and manufacturing EV batteries. (Credit: Volvo Car Corporation)
Volvo Car Group (Volvo Cars) and Swedish battery company Northvolt announced plans to jointly open a research and development (R&D) centre for electric vehicle (EV) batteries in Gothenburg, Sweden as part of a SEK30bn ($3.3bn) investment.
The R&D centre, which is slated to become operational in 2022, will generate a few hundred roles in Gothenburg. It is the result of an announcement made by the two parties in June 2021 for creating a 50:50 joint venture (JV) for developing and producing sustainable batteries.
The batteries produced by the JV will be customised to power Volvo Car’s next generation of fully-electric Volvo and Polestar cars.
Volvo Cars and Northvolt have now signed a binding agreement in this regard.
The Gothenburg R&D centre will be built in close proximity to Volvo Cars’ own R&D operations and to the existing Northvolt Labs in Västerås in order to ensure synergies and efficiencies.
Volvo Cars chief executive Håkan Samuelsson said: “Our partnership with Northvolt secures the supply of high-quality, sustainably-produced batteries for the next generation of pure electric Volvos.
“It will strengthen our core competencies and our position in the transformation to a fully electric car company.”
After establishing the Swedish R&D centre, the partners will embark on building a new battery manufacturing plant in Europe. The exact location of the manufacturing plant is anticipated to be confirmed early next year.
The plant will potentially have a capacity of producing up to 50GWh of battery cells. It will supply batteries for nearly half a million cars per annum.
Expected to break ground in 2023, the battery manufacturing plant is aimed to achieve large scale production in 2026. Up to 3,000 people are likely to be employed by the plant.
Northvolt chief executive Peter Carlsson said: “Volvo Cars is an excellent partner on the road towards building up a supply of battery cells that are made in Europe with a very low carbon footprint, and that are optimised through vehicle integration to get the best performance out of the next generation EVs.”
Earlier this year, Volvo Cars pledged to become a fully electric premium car brand by the end of 2030. By 2025, the Swedish automaker aims to see half of its global sales to be driven by fully electric cars.