Volvo Car Group and Northvolt join forces in battery development and production

Volvo Car Group plans to create a joint venture with the prominent Swedish battery company Northvolt. The aim is to design and manufacture eco-friendly batteries for the next generation of Volvo and Polestar electric vehicles.

The first phase of the 50/50 partnership between Volvo Car Group and Northvolt involves setting up a research and development center in Sweden, slated to begin operations in 2022. This center will leverage the battery expertise of both companies to create advanced battery cells and vehicle integration technologies for Volvo and Polestar vehicles.

Additionally, the planned joint venture will construct a new gigafactory in Europe, with the potential to produce up to 50 gigawatt hours (GWh) of batteries annually, starting production in 2026. Starting in 2024, Volvo Car Group will also buy 15 GWh of battery cells each year from Northvolt Ett’s existing battery plant in Skellefteå, Sweden.

These collaborations with Northvolt will bolster Europe’s demand for battery cells and support Volvo Cars’ ambitious electrification goals, aiming for 50% of their car sales to be electric by the mid-2020s and a complete transition to electric cars by 2030.

Volvo Car Group recognizes that battery production for electric cars is a significant source of carbon dioxide emissions. Partnering with Northvolt, a leader in sustainable battery production near their European production sites, will help reduce the environmental impact of sourcing and making batteries for future vehicles.

The partnership aims to provide high-quality and sustainable battery cells to drive Volvo Cars’ transformation into an all-electric car company. The gigafactory, powered by clean energy, is expected to employ about 3,000 people, with its location yet to be determined. The first car to use a battery cell from this joint venture will be the electric successor to the popular Volvo Cars XC60 model.

Volvo Cars and Polestar are known for their leadership in electrification, and they plan to create the most eco-friendly battery cells. This partnership is central to Volvo Cars’ goal of leading the premium electric car market and selling only electric vehicles by 2030.

For Polestar, it contributes to their European growth plans and commitment to the Polestar 0 project, which aims to develop a completely climate-neutral vehicle by 2030. By developing their own battery cell technology with Northvolt, they can tailor batteries to meet the needs of Volvo and Polestar customers, offering better range and shorter charging times.

Javier Varela, Head of Industrial Operations and Quality, stressed the importance of this collaboration to achieve their full electrification goal by 2030, as batteries are a crucial component of electric cars. Volvo Cars will share more about its future technology plans at the Volvo Cars Tech Moment on June 30.

It’s important to note that these collaborations and joint ventures are still pending final negotiations and agreements, including board approval.

Volvo Car Group in 2020

In the financial year of 2020, Volvo Car Group reported an operating profit of SEK 8.5, down from SEK 14.3 in 2019. Total revenues for the year amounted to SEK 262.8, a decrease from SEK 274.1. Global sales for 2020 reached 661,713 vehicles, representing a 6.2% drop compared to 2019.

About Volvo Car Group:

Volvo Cars, established in 1927, is currently one of the world’s most renowned and respected car brands. In 2020, they sold 661,713 cars across approximately 100 countries. Since 2010, Volvo Cars has been under the ownership of Zhejiang Geely Holding.

As of December 2020, Volvo Cars employed around 40,000 full-time staff. The company’s headquarters, product development, marketing, and administration operations are primarily located in Gothenburg, Sweden, with the Asia-Pacific headquarters situated in Shanghai. Central car production facilities are in Gothenburg (Sweden), Ghent (Belgium), South Carolina (USA), Chengdu and Daqing (China), while engines are manufactured in Skövde (Sweden) and Zhangjiakou (China), and body components in Olofström (Sweden).

In line with their new objective, Volvo Cars aims to provide customers with the “Freedom to Move” in a sustainable and secure manner. This goal is reflected in several business ambitions, such as targeting half of global sales to consist of fully electric cars by the middle of this decade and establishing five million direct customer relationships. Volvo Cars is also dedicated to reducing its carbon footprint and aspires to become a climate-neutral company by 2040.

About Polestar

Polestar is an independent Swedish luxury car brand that was founded in 2017 through a collaboration between Volvo Cars and Geely Holding. Leveraging technological and engineering synergies with Volvo Cars, Polestar benefits from cost-effective production. The company is headquartered in Gothenburg, Sweden, and its vehicles are available in ten global markets across Europe, South America, and China. In 2021, Polestar is expanding its presence to eight new markets in Europe and the Asia-Pacific region.

Polestar’s vehicle lineup includes two types of electric sports cars. The Polestar 1 is a low-volume electric GT hybrid featuring a carbon fiber body, 609 HP of power, 1,000 Nm of torque, and a range of 124 km (WLTP), making it the hybrid car with the longest electric range in the world. The Polestar 2, on the other hand, is a fully electric high-volume performance fastback. It offers three variants with different battery capacities of up to 78 kWh, as well as dual and single drivetrains capable of producing up to 300 kW (408 HP) and 660 Nm of torque.

In the future, Polestar’s product range will include the Polestar 3, an electric performance SUV, and the Percept, a concept vehicle introduced in 2020 and expected to enter production. The Percept showcases the brand’s vision for the future, emphasizing sustainability, digital technology, and innovative design.

About Northvolt

Northvolt is a European provider of high-quality battery cells and battery systems produced in an environmentally sustainable manner. Founded in 2016, the company’s mission is to create the most eco-friendly battery with minimal carbon footprint and maximum recyclability, contributing to Europe’s shift towards a decarbonized future. Northvolt employs over 1,100 people from 76 different nationalities at its facilities in Sweden, Germany, and Poland. Notable business partners and clients of Northvolt include ABB, BMW Group, Scania, Siemens, Vattenfall, Vestas, and Volkswagen Group.

Since 2018, the company has been operating in Poland under the name Northvolt Poland Sp. z o. o., established to meet the growing demand for complete battery systems. In Gdańsk, the company manufactures energy storage systems and battery modules that replace traditional combustion engines in industrial machines. Currently, Northvolt Poland has plans to invest USD 200 million in Gdańsk to construct a highly automated production facility spanning 50,000 square meters, aiming to increase its production capacity.