Volvo Cars and Northvolt are to open a joint R&D centre in Gothenburg as part of a SEK30bn (US$3.3bn) investment in battery development and manufacturing.
The R&D centre, which will become operational in 2022, will create a few hundred jobs in Gothenburg and positions Volvo Cars as a manufacturer able to make battery cell development and production part of its end-to-end engineering capabilities.
Following the partnership announced by both companies earlier this year, Volvo Cars and Northvolt have now signed a binding agreement this week to create a joint venture for the development and production of batteries for the next generation of pure electric Volvo cars.
The establishment of the new Gothenburg R&D centre will be followed by the construction of a new manufacturing plant in Europe. It will produce battery cells, specifically developed for use in pure electric Volvo and Polestar cars. The location of the plant is expected to be confirmed in early 2022.
The new facility will be close to to Volvo Cars’ own R&D operations and to Northvolt’s existing innovation campus, Northvolt Labs in Västerås, Sweden.
“Our partnership with Northvolt secures the supply of sustainably-produced batteries for the next generation of pure electric Volvos,” said Volvo Cars chief executive, Håkan Samuelsson.
“It will strengthen our core competencies and our position in the transformation to a fully electric car company.”
The partnership will focus on developing tailor-made batteries for range and quick charging times. Volvo is working with Northvolt to create an end-to-end system for batteries, whereby it develops and builds the batteries itself.
Northvolt noted vertical integration is important as the battery represents the largest individual cost component in an electric car, as well as a major part of the carbon footprint.
“Volvo Cars is an excellent partner on the road towards building up a supply of battery cells made in Europe with a very low carbon footprint and optimised through vehicle integration to get the best performance out of the next generation EVs,” said Northvolt chief executive, Peter Carlsson.
For the joint battery plant, Volvo 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 around 0.5m 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, which are part of Volvo Cars’ electrification plans. It aims to sell 50% pure electric cars by the middle of this decade and by 2030 it aims to sell only fully electric ones.
https://northvolt.com/articles/volvo-northvolt-dec2021/