Swedish auto manufacturer Volvo announced its partnership with battery manufacturer Northvolt regarding the construction of a 50GWh battery plant in Gotherburg, Sweden, that will satisfy 500K of EVs each year, and is expected to create 3,000 job opportunities. The battery plant is scheduled for groundbreaking in 2023, before commencing operation in 2025, and will be primarily tasked with producing batteries used for Volvo’s next generation BEVs and Polestar.
Volvo aims to increase its ratio of BEV sales to 50% by 2025, and only release BEVs in 2030. Headquartered in Stockholm, Northvolt strives to elevate its battery capacity to 150GWh per year by 2030, and has managed to obtain investment from Goldman Sachs and Volkswagen so far.
Volvo announced in December 2021 that it would co-fund a joint venture with Northvolt that will be tasked with developing EV batteries, including the construction of a super factory and a R&D center, at a total investment of roughly SEK30 billion. The two companies believe that the joint venture will become an essential battery manufacturer in Europe, and will shape up to be one of the largest battery representatives in the continent.
Simultaneously, Volvo and Northvolt also appointed Adrian Clarke, a former Tesla executive, as the factory manager. When talking about whether the new joint venture is going to deploy in Asia and America, Javier Varela, the Head of Engineering and Operations at Volvo, pointed out that all operations will move forward steadily. The joint venture will first focus on fulfilling demand in Europe, before moving on to other regions in the future, Varela said.
Both Volvo and Northvolt believe that regionalization of supply chains will become an inevitable tendency. Northvolt CEO Peter Carlsson commented that the focus is placed on Europe because the continent serves as an important base for infrastructures. Despite electrification being a global trend, the weight of batteries and the complexity of relevant transportation laws must also be taken into account. Thus, a continuous exploration in supply chain regionalization is indispensable.
The European Automobile Manufacturers’ Association (ACEA) commented that the EU had 538,734 new electric passenger cars in 2021, and the figure rose to roughly 878,432 in 2021. Among new sedans, the ratio of electric models had reached 9.1% in 2021, and traditional vehicles still dominated the market at a ratio of approximately 59.6% despite a slight reduction in registrations.
(Cover photo source: Volvo)