Volvo has outlined plans to establish a joint venture with Swedish battery company Northvolt to develop and produce more sustainable batteries.
As a first step for the 50/50 joint venture, Volvo Car Group and Northvolt will look to set up a research and development centre in Sweden that will begin operations in 2022.
The centre is intended to build on the battery expertise within both companies and develop next-generation battery cells and vehicle integration technologies, specifically developed for use in Volvo and Polestar cars.
The planned joint venture will also establish a new gigafactory in Europe with a potential capacity of up to 50 gigawatt hours (GWh) per year. Production is scheduled to start in 2026.
As part of the plans, Volvo Car Group is also looking to source 15 GWh of battery cells per year from the existing Northvolt Ett battery plant in Skellefteå, Sweden, starting in 2024.
Alongside previously announced battery supply agreements, a partnership with Northvolt will secure the European battery cell needs that will drive Volvo Cars’ ambitious electrification plans. Volvo is aiming for 50% of sales to come from pure electric cars by the middle of this decade, and by 2030 it aims to sell only fully electric cars.
Håkan Samuelsson, chief executive at Volvo Car Group, commented: “By working with Northvolt we will secure a supply of high-quality, more sustainable battery cells for our pure electric cars.
“Working closely with Northvolt will also allow us to strengthen our in-house development capabilities.”
The new gigafactory, planned to be powered by 100% clean energy, is expected to employ around 3,000 people with the location of the new plant yet to be decided. The first car to feature battery cells developed through the joint venture will be the electric successor to Volvo Cars’ best-selling XC60 model.
Peter Carlsson, co-founder and CEO of Northvolt, commented: “Volvo Cars and Polestar are industry leaders in the transition to electrification, and perfect partners on the journey ahead as we aim to develop and produce the world’s most sustainable battery cells. We are proud to become their exclusive battery cell production partner in Europe.”
“Developing the next generation of battery cell technology in-house, together with Northvolt, will allow us to design batteries specifically for Volvo and Polestar drivers,” added Henrik Green, chief technology officer at Volvo Cars. “With cells developed in-house for our electric cars, we can focus on giving Volvo and Polestar customers what they want, such as range and short charging times.”
“Collaborating with Northvolt is an important step for our industrial network as we move towards all-out electrification by 2030,” said Javier Varela, head of industrial operations and quality. “Batteries are one of the most important parts in a fully electric car, and by partnering with Northvolt we ensure an efficient and cost-effective supply chain of high-quality and sustainable batteries in Europe.”
Volvo Cars will reveal more details on its future technology roadmap at the Volvo Cars Tech Moment, to be held on 30th June. The partnership and joint venture are subject to final negotiation and agreements between the parties, including board approval.