Sweden’s Volvo Car Group and battery maker Northvolt have joined forces to build a new battery factory in Europe and conduct research on sustainable production as the car manufacturer aims to sell only electric vehicles (EVs) by 2030.
The planned gigafactory will have a potential capacity of 50 gigawatt hours (GWh) per year, with production expected to start in 2026 and location yet to be decided. The companies also aim to set up a research and development centre in Sweden to begin operations in 2022.
The move would allow Volvo, which is owned by Chinese automaker Geely, to equip around 800,000 vehicles per year. The Swedish battery maker will, in turn, become Volvo Cars’ exclusive battery cell production partner in Europe.
As part of the plans, the automaker is also looking to source 15 GWh of battery cells per year from the existing Northvolt Ett battery plant in Skellefteå, Sweden, starting in 2024.
The production of batteries for Volvo Car Group’s full EVs represents a large part of the car’s total lifecycle carbon emissions. By working with Northvolt, the company will be able to reduce the environmental footprint attributable to battery sourcing and production for its future cars, it said in the statement.
“By working with Northvolt we will secure a supply of high-quality, more sustainable battery cells for our pure electric cars,” Håkan Samuelsson, chief executive at Volvo Car Group, said in the statement. “Working closely with Northvolt will also allow us to strengthen our in-house development capabilities.”
While the gigafactory, planned to be powered 100% by clean energy, should be enough to cover Volvo’s needs in Europe, the company will need similar set-ups in China and the US, its two biggest markets.
Electric successor to Volvo’s XC60 model will be the first car to feature battery cells developed through the joint venture, the company said.
The European Union is currently rebuilding automotive supply chains around battery metals, and incentivizing the adoption of EVs.
European Commission Vice President Maros Sefcovic has said that, by 2025, large-scale battery plants currently under construction will produce cells to power at last six million electric vehicles.
Local automakers are rushing to get access to enough batteries for electric cars, with VW alone planning six gigafactories. The German company considered the acquisition of Northvolt, Europe’s great battery hope, for its site in Salzgitter, but decided to make batteries there on its own.
The firm plans to construct a factory in France, Spain or Portugal by 2026 and one in Poland, Slovakia or the Czech Republic by 2027, plus another two sites at European locations that have yet to be identified.
Founded by former Tesla executives, Northvolt is backed by top investors including Goldman Sachs. The company, valued at about $12 billion, has also set up partnerships with BMW and Scania.