Volvo & Northvolt open new EV battery R&D facility

Volvo Cars and battery developer Northvolt are to work together to develop and produce the next generation of battery packs for the Swedish automaker's electric vehicles.

The R&D centre, which will become operational in 2022, will create a few hundred jobs in Gothenburg and is set to position Volvo Cars as one of the few automotive brands to make battery cell development and production part of its end-to-end engineering capabilities.

Following the partnership announced by both companies earlier this year, Volvo Cars and Northvolt have now signed a binding agreement to create a joint venture for the development and sustainable production of batteries for the next generation of pure electric Volvo cars.

Read more: Northvolt increases planned gigafactory capacity due to high demand

The establishment of the new R&D centre in Gothenburg will be followed by the construction of a new manufacturing plant in Europe. It will produce next-generation state-of-the-art battery cells, specifically developed for use in next-generation pure electric Volvo and Polestar cars. The exact location of the plant is expected to be confirmed in early 2022.

Large scale production will start in 2026, creating 3,000 jobs in the area and supplying enough batteries for around 500,000 electric cars per year. The move also means Volvo will become the latest manufacturer to adopt the Tesla business model, moving its entire battery research and production operations in-house.

“Our partnership with Northvolt secures the supply of high-quality, sustainably produced batteries for the next generation of pure electric Volvos,” said Håkan Samuelsson, Chief Executive for Volvo Cars. “It will strengthen our core competencies and our position in the transformation to a fully electric car company.”

Read more: Volvo Cars starts production of its latest fully electric model

Volvo also says this new partnership will help it along the road to becoming an electric-only manufacturer by 2030. The firm also plans for 50% of its sales to come from electric cars by the middle of the decade.

The partnership with Northvolt is key to Volvo Cars’ ambition to become a leader in the premium electric car segment and sell only electric vehicles by 2030. It also represents an important step in strengthening Volvo Cars’ own development capabilities.

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