Volvo Car Group, which is owned by China’s Geely Holding, has announced plans for a joint venture with Swedish battery maker Northvolt to develop sustainable batteries for electric cars and build a gigafactory for production.
The companies aim to set up a research and development center in Sweden to start operations in 2022 and start a gigafactory in Europe with a potential capacity to produce up to 50-gigawatt hours (GWh) per year in 2026.
Mr. Hakan Samuelsson, Chief Executive Officer Volvo Car Group remarked that “working closely with Northvolt will also allow us to strengthen our in-house development capabilities.”
Northvolt will become Volvo Cars’ exclusive battery cell production partner in Europe. The gigafactory will be fueled by clean energy and will employ approximately 3,000 people. The plant’s site is yet to be determined.
Northvolt recently raised $2.75 billion in equity to boost capacity at a factory it is building in northern Sweden, and Volvo aims to start source battery cells from that plant starting in 2024.
Northvolt’s biggest stakeholder is German automaker Volkswagen, and the battery maker has got contracts worth billions from companies like BMW and Scania.
Battery makers are scrambling to keep up with demand as carmakers transition to electric in order to minimize global warming carbon emissions.
By the middle of this decade, Volvo Cars aim to sell 50 percent pure electric automobiles, and by 2030, it wants to sell solely entirely electric cars.
The electric successor to Volvo’s XC60 model will be the first car to use joint venture-developed battery cells.