Volvo Cars and Northvolt start battery research earlier

The Swedish Geely subsidiary Volvo Cars and the similarly Swedish battery manufacturer Northvolt have announced that they plan to open their previously announced joint research and development center in Gothenburg as early as 2022. The new facility is part of a comprehensive investment package worth 30 billion Swedish Krona (approximately 2.93 billion euros) aimed at advancing battery development and production. As one of the few automotive brands, this will integrate battery cell manufacturing into its technical portfolio. After both companies had already announced a close partnership at the beginning of the year, a joint venture was agreed upon this week for the development and sustainable production of batteries to be used in the next generations of Volvo cars.

The new research and development center, which will create hundreds of new jobs, is just the beginning. The next step involves the establishment of a new European production facility for the manufacture of next-generation advanced battery cells. These are being specifically developed for future electric cars from Volvo and Polestar. The exact location of the plant is expected to be announced in early 2022.

Proximity to Existing Facilities

The new research and development center is located in close proximity to the existing Volvo research and development facilities and the Northvolt Labs innovation campus in Västerås, Sweden, promoting synergies and efficiency in the development of battery technologies.

"Our partnership with Northvolt ensures the supply of high-quality, sustainably produced batteries for the next generation of fully electric Volvo models," explains Håkan Samuelsson, President and CEO of Volvo Cars.

This will strengthen core competencies and the position in the transition to becoming a purely electric car manufacturer, believes Samuelsson. The partnership will focus on developing customized batteries that offer the desired range and short charging times for the brand's drivers. Volvo is working with Northvolt to create an "end-to-end system" for batteries, with the company developing and manufacturing the batteries itself. This deep vertical integration is considered important by the Swedes, as batteries are the largest single cost item for electric cars and also significantly influence the carbon footprint.

"Volvo Cars is an excellent partner for building a production network for battery cells that are manufactured in Europe and have a small carbon footprint. Through vehicle integration, we achieve the best possible performance for the next generation of electric cars," adds Peter Carlsson, CEO of Northvolt.

The search for a European location for the joint battery plant is also expected to enter the final phase. The production facility planned by Volvo Cars and Northvolt is expected to provide an annual capacity of up to 50 gigawatt-hours (GWh), which corresponds to the battery needs of around half a million electric cars per year. Construction is scheduled to begin in 2023, with large-scale production starting in 2026. The plant is expected to create up to 3,000 jobs.

Covering European Demand

The partnership with Northvolt aims to secure the European demand for battery cells, which is part of the ambitious electrification plans of the Chinese Geely Group’s subsidiary. The Scandinavian automotive manufacturer aims to take a leading role in the fully electric premium segment. By the middle of this decade, every second vehicle sold is expected to be fully electric, and by 2030, the company will offer exclusively electric cars. The cooperation with Northvolt also strengthens the development capacities of the Swedish brand, believes the company in Gothenburg.