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Volvo and Northvolt build green battery factory in Gothenburg
The Swedish subsidiary of the Chinese Geely Group, Volvo Cars, has announced the construction of a new battery factory in cooperation with the Swedish battery specialist Northvolt. The new manufacturing facility is expected to create up to 3,000 jobs and go into operation in 2025. It will complement the planned research and development center that the two Swedish companies announced in December 2021. Overall, the partners are investing around 30 billion Swedish kronor (approximately 2.9 billion euros) in joint battery development and production. The new battery manufacturing and collaboration with Northvolt are important components of the electrification strategy, according to the manufacturer.
Volvo aims to become the fastest transformer
They want to become the "fastest transformer in the automotive industry," explained Håkan Samuelsson, President and CEO of Volvo Cars, during a web conference. Even though the Volvo chief had to announce a sales decline due to the semiconductor crisis, the goal is to produce 1.2 million vehicles by mid-decade, half of which will be pure BEVs. Additionally, the CO2 footprint is expected to decrease by 40 percent by 2025, promised Samuelsson. They are currently transitioning from initially focused PHEV models, which are expected to offer double the electric range in the future, to pure BEVs, as recently demonstrated by the all-electric Volvo C40. By 2030, only fully electric vehicles will be sold, according to the plan.
An important component of these plans is the new battery factory, whose construction will begin in 2023. The battery cells for the next generation of purely electric Volvo and Polestar models will be produced there. With a potential production capacity of up to 50 gigawatt-hours (GWh) per year, high-voltage batteries for about half a million electric vehicles could be manufactured, the manufacturer calculates.
Proximity to Existing Infrastructure
The chosen location in Gothenburg offers, from the Swedish perspective, the advantages of direct access to the largest Volvo plant in Torslanda, as well as the benefits of existing infrastructure, renewable energy supply, and qualified professionals. The research and development departments of Volvo Cars and Northvolt are also located in close proximity.
“Our battery cell partnership with Northvolt is key to our strategic ambitions in the field of electrification. We aim to become a leader in the fully electric premium segment,” explains Samuelsson further.
Targeting Sustainable Production
Building this gigafactory in Gothenburg is a crucial step to further transform one of the most dynamic automotive regions in the world and become the leading provider of sustainable batteries, adds Peter Carlsson, co-founder and CEO of Northvolt. The new battery plant will therefore be powered exclusively by fossil-free energy – with a focus on renewable energies from the region. For instance, offshore wind farms are planned to supply energy, according to manufacturing chief Varela. This supply shall also be secured before the factory goes into operation.
"Technical solutions" are also intended to enable a circular economy and improve resource efficiency. Battery production accounts for a significant portion of the CO2 emissions that an electric car produces over its lifecycle. Through cooperation with Northvolt and production in close proximity to European manufacturing sites, the ecological footprint can be significantly reduced, believe the providers.
“We want to build a fully climate-neutral production network and ensure the supply of high-quality batteries for the coming years. The new battery plant plays a central role in this,” says Javier Varela, Head of Engineering & Operations at Volvo Cars.
Through our partnership with Northvolt, we also aim to create a comprehensive battery value chain, from raw material to complete vehicle, ensuring optimal integration.
Development and Production in Our Own Hands
The agreed joint venture for battery production will be one of the largest producers in Europe. The new production facility will be led by former Tesla manager Adrian Clarke. The research and development center, which will begin operations this year, is expected to create several hundred more jobs in Gothenburg. This transformation positions the Swedish manufacturer as one of the few automotive companies that possess the development and production of battery cells in-house. Together with Northvolt, they intend to develop "custom-made" batteries and vehicle integration capabilities.
Already Eyeing the Generation After Next
The goal is to offer the drivers of these brands the greatest possible ranges and shortest charging times. The capabilities of the generation after next should surpass even those of the new generation planned for 2024, especially concerning cold performance, energy density, and charging times, hinted Northvolt CEO Carlsson. The key is to improve not only cell chemistry but also battery and energy management.
Vertical integration of battery development and production is therefore of great importance, as the battery not only accounts for a large part of the CO2 balance but also represents the largest cost component of an electric car, argues the provider further. Additionally, according to Carlsson, they aim to reduce dependency on China and the Far East for battery cells and also want to build European networks for critical raw materials. At the same time, they hope to manage supply chain issues that have recently impacted Volvo's sales numbers due to the semiconductor shortage, as Samuelsson confirmed.
Translated automatically from German.
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