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Volvo Cars, Northvolt to set up new battery giga factory in Sweden

The new facility will produce battery cells specifically developed for use in next-gen Volvo and Polestar cars. Source: Volvo Cars

Volvo Cars and Northvolt have selected Gothenburg in Sweden to establish a new battery manufacturing plant. The facility is scheduled to commence its operations in 2025, with a potential annual cell production capacity of up to 50 GWh, which would supply batteries for approximately half a million cars per year.

The new facility complements the planned R&D centre that both companies announced in December last year as part of an investment of approximately SEK 30 billion. This significantly strengthen Volvo Cars' electrification strategy, as the company aims to produce and sell only fully-electric cars by 2030.

"Our battery cell partnership with Northvolt is key to our strategic ambitions in electrification," said Håkan Samuelsson, Volvo Cars chief executive. "We are committed to becoming a leader in the premium electric car segment and selling only pure electric vehicles by 2030."

The companies say that the new plant will produce state-of-the-art battery cells specifically developed for use in next generation pure electric Volvo and Polestar cars. It's location in Torslanda, Gothenburg offers benefits in terms of a direct route into Volvo Cars' largest car plant, access to infrastructure, a strong pipeline of renewable energy supply and relevant job competences, as well as its proximity to both Volvo Cars' and Northvolt's R&D units, they add.

"Establishing this gigafactory in Gothenburg is a decisive move, both to continue to transform one of the most dynamic automotive regions in the world, and to become the leading global supplier of sustainable batteries", said Peter Carlsson, Co-Founder and CEO of Northvolt.

To ensure sustainable production, the plant is to be powered by fossil-free energy with focus on driving renewable energy capacity in the region, and will integrate engineering solutions which prioritise circularity and resource efficiency.

Battery production for Volvo Cars' and Polestar's fully electric models represents a large part of each car's total life cycle carbon emissions. By working with Northvolt, a leader in sustainable battery production, and producing batteries near its manufacturing facilities in Europe, the brands plan to significantly reduce the environmental footprint attributable to battery sourcing and production for their future cars.

"Our new battery plant will support our ambition to have a fully climate neutral manufacturing network and secure a supply of high-quality batteries for years to come," said Javier Varela, head of engineering and operations at Volvo Cars. "Through our partnership with Northvolt we will also benefit greatly from an end-to-end battery value chain, from raw material to complete car, ensuring optimal integration in our cars."

The battery cell production joint venture between Northvolt and Volvo Cars will be a significant player in European battery cell production and will represent one of the largest cell production units in Europe. The companies have appointed former Tesla executive Adrian Clarke to lead the production company.

The JV will focus on developing tailor-made batteries and vehicle integration concepts that offer long range and quick charging times. Establishing deep vertical integration of battery development and production is important for the partners, since the battery represents the largest individual cost component in an electric car, as well as a major part of the carbon footprint, they claim. 

Author : Dhiyanesh Ravichandran
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