Volvo Cars and Northvolt will open a joint research and development (R&D) centre in Gothenburg as part of a SEK 30 billion investment in battery development and manufacturing. The R&D centre, set to open in 2022, will create a few hundred jobs in Gothenburg and according to Volvo Cars, will make them one of the few automotive brands to make battery cell development and production part of its end-to-end engineering capabilities. This week, Volvo Cars and Northvolt have now signed a binding agreement to create a joint venture for the development and sustainable production of batteries for the next generation of pure electric Volvo cars.
The establishment of the new research and development (R&D) centre in Gothenburg will be followed by constructing a new manufacturing plant in Europe. It will produce next-generation state-of-the-art battery cells, developed explicitly for use in next-generation pure electric Volvo and Polestar cars. The plant's exact location is expected to be confirmed in early 2022. The R&D centre will be near Volvo Cars’ own R&D operations and to Northvolt’s existing innovation campus Northvolt Labs in Västerås, Sweden, ensuring synergies and efficiencies as it develops battery technologies.
“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 the new partnership will develop tailor-made batteries that give their drivers what they want, such as range and quick charging times. In addition, Volvo Cars is working with Northvolt to create a true end-to-end battery system, whereby it develops and builds the batteries itself. This deep vertical integration is important since the battery represents the largest individual cost component in an electric car and a major part of the carbon footprint.
“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 optimized through vehicle integration to get the best performance out of the next generation EVs,” said Peter Carlsson, chief executive for Northvolt.
As for their joint battery plant, Volvo Cars and Northvolt are in the final phase of a selection process to find a suitable location in Europe. The plant will have a potential annual capacity of up to 50 gigawatt hours (GWh), which would supply batteries for approximately half a million cars per year. It will start construction in 2023, with large scale production in 2026, and is expected to employ up to 3,000 people.
Alongside battery supply agreements, the partnership with Northvolt secures the European battery cell needs that are part of Volvo Cars’ ambitious electrification plans. It aims to sell 50 per cent pure electric cars by the middle of this decade, and by 2030 it aims to sell only fully electric cars.
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