Volvo Car Group is to establish a joint venture with leading Swedish battery company Northvolt. The battery producers are already well established in the electric car world and work with other big brands including Volkswagen. The idea of this partnership is to develop and produce more sustainable batteries, tailored to power the next generation of pure-electric Volvo and Polestar electric vehicles (EVs).
As a first step for the joint venture, Volvo and Northvolt aim to set up a research and development centre in Sweden, where operations will begin in 2022. The centre is intended to build on the battery expertise within both companies and develop next-generation, state-of-the-art battery cells and vehicle integration technologies, specifically developed for use in Volvo and Polestar cars.
As part of the new venture, they will also establish a new gigafactory in Europe, with a planned potential capacity of up to 50-gigawatt hours (GWh) per year. This will be powered by 100 percent clean energy and is expected to employ around 3,000 people. Production is scheduled to start in 2026.
As part of the collaboration, Volvo will also source 15 GWh of battery cells per year from the existing Northvolt Ett battery plant in Skellefteå, Sweden, starting in 2024.
Alongside previously announced battery supply agreements, the partnership with Northvolt will secure the European battery cell needs that will drive Volvo Cars’ ambitious electrification plans. Volvo Cars aim to sell 50 percent battery electric vehicles (BEVs) by 2025, and sell only fully electric cars by 2020.
Today, the production of batteries for Volvo’s fully-electric cars represents a large part of the car’s total lifecycle carbon emissions. Working with Northvolt, a leader in sustainable battery production, and producing batteries near its manufacturing facilities in Europe, Volvo will reduce the environmental footprint attributable to battery sourcing.
Håkan Samuelsson, Volvo Car Group CEO, said: “By working with Northvolt we will secure a supply of high-quality, more sustainable battery cells for our pure electric cars.
“Working closely with Northvolt will also allow us to strengthen our in-house development capabilities.”
Peter Carlsson, Northvolt co-founder and CEO, said: “Volvo Cars and Polestar are industry leaders in the transition to electrification, and perfect partners on the journey ahead as we aim to develop and produce the world’s most sustainable battery cells
“We are proud to become their exclusive battery cell production partner in Europe.”
The partnership and joint venture are subject to final negotiation and agreements between the parties, including board approval.