At a time when car companies are struggling with supply shortages, Volvo has reached an agreement with Swedish battery developer and manufacturer Northvolt to build a new battery plant. With this agreement, Volvo has strengthened its plan to produce and sell only fully electric cars by 2030. The construction of a new plant in Gothenburg will create several thousand new jobs, and will cost 30 billion kroner (2.863 billion euros / 3.278 billion USD).

Gothenburg was chosen for its good infrastructural links with Volvo’s car factory and the R&D centers of both companies.

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

The plant will have an annual production capacity of 50 gigawatt hours which is enough for 500,000 cars. Northwolt co-founder and CEO Peter Carlsson said the goal of building the plant was “to become the world’s leading supplier of sustainable batteries.”

“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. 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, ”said Javier Varela, head of engineering and operations at Volvo Cars.

Construction of the plant will begin in 2023, which will begin operations in 2025.

Source: Volvo Cars