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Volvo Cars & Northvolt are Building a 50 GWh EV Battery Factory in Sweden, Will Be One of the Largest in Europe

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【Summary】​Automaker Volvo Cars and its electric vehicle battery partner Northvolt are establishing a new battery manufacturing plant in Gothenburg, Sweden which will start producing batteries in 2025, the two companies announced. Once completed, the battery cell joint venture factory will be one of the largest EV battery cell factories in Europe. Volvo Cars and Northvolt appointed former Tesla executive Adrian Clarke to lead the new joint venture.

Eric Walz    Feb 07, 2022 10:00 AM PT
Volvo Cars & Northvolt are Building a 50 GWh EV Battery Factory in Sweden, Will Be One of the Largest in Europe

Automaker Volvo Cars and its electric vehicle battery partner Northvolt are establishing a new battery manufacturing plant in Gothenburg, Sweden which will start producing batteries in 2025, the two companies announced. 

The factory will create up to 3,000 jobs and complement the planned R&D center that both companies announced in December as part of an investment of approximately SEK 30 billion (US$3.2 billion).

The construction of the plant will begin next year. 

Once completed, the battery cell joint venture between Northvolt and Volvo Cars will be one of the largest EV battery cell factories in Europe. Volvo Cars and Northvolt have appointed former Tesla executive Adrian Clarke to lead the new joint venture.

The new plant will further Volvo's alliance with Northvolt and support its electrification strategy. The automaker plans to only offer battery-powered vehicles by 2030. The factory will produce state-of-the-art battery cells, specifically developed for use in next-generation Volvo and Polestar electric vehicles.

"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 plant will have an annual cell production capacity of up to 50 gigawatt hours (GWh), which is enough batteries to supply roughly half a million cars per year, according to Northvolt. The company also plans to establish recycling capabilities so that roughly 50% of all raw materials for battery production will be sourced from recycled EV batteries by 2030.

The location of the plant in Torslanda, Gothenburg was specifically chosen. It will offer a direct supply route into Volvo Cars' largest automotive factory in Sweden, as well as its proximity to both Volvo Cars' and Northvolt's R&D centers.

The Northvolt factory is also located near Sweden's primary nickel, cobalt, lithium and graphite deposits, which are the raw materials needed for battery production.

"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.

The goal of both companies is to achieve sustainable production in the future. The plant will be powered by fossil-free energy with focus on driving renewable energy capacity in the region.

By working with Northvolt, a leader in sustainable battery production, and producing batteries near its manufacturing facilities in Europe, Volvo Cars and Polestar can significantly reduce the environmental footprint attributable to battery sourcing and production for their future cars.

Establishing deep vertical integration of battery development and production is important for Volvo Cars and its electric brand Polestar, since the battery represents the largest individual cost component in an electric car, as well as a major part of the automaker's carbon footprint.

"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 R&D center of the plant will become operational in 2022 and will create a few hundred jobs in Gothenburg. Like Tesla's partnership with Panasonic, Volvo Cars will be one of a few automakers to make battery cell development and production part of its end-to-end engineering capabilities.

The partnership between Volvo Cars and Northvolt will focus on developing batteries that offer a long range and quick charging capabilities. 

Northvolt was co-founded in 2016 as "SGF Energy" by former Tesla executives, Carlsson and Paolo Cerruti. In 2017, the company officially changed its name to Northvolt with Carlsson serving as CEO.

At Tesla, Carlsson was Global Head of Sourcing & Supply Chain from 2011 to 2015 and worked alongside Tesla CEO Elon Musk for over four years. He also helped launch the Model S and managed Tesla's supply chain, which included over 300 suppliers at the time. 

Cerruti joined the company in 2016 after serving as VP of Global Supply Chain & Operations Planning at Tesla from March 2012 to Feb 2016. He currently serves as Northvolt's Chief Operating Officer.

In June 2021, Northvolt announced the signing of a $2.75 billion private placement to finance further battery cell production capacity and R&D efforts to meet the increasing demand from its other automotive customers, which includes Volkswagen and BMW.

Northvolt anticipates building at least two more gigafactories in Europe in the next decade and is actively exploring building a factory in Germany.


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