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Volvo Car Group and Northvolt to establish a joint venture for battery production

Volvo Car Group revealed that it intends to start a joint venture with Swedish company Northvolt to produce sustainable batteries tailored specifically to Volvo and Polestar vehicles. Volvo and Northvolt will have a 50 percent stake each in the company. A research and development center will open in Sweden and start operations in 2022. The focus will be on building on battery expertise between both companies and developing next-generation cells for Volvo and Polestar’s battery-electric vehicles.

The joint venture will also open a gigafactory in Europe with a capacity of 50 GWh per year. Production is expected to start in 2026. Volvo Car Group is also aiming to secure an additional 15 GWh of battery cells per year from Northvolt’s Ett facility in Skellefteå, Sweden from 2024. Working with Northvolt will help Volvo reduce its carbon footprint when sourcing and producing batteries for its next-generation EVs.

“By working with Northvolt we will secure a supply of high-quality, more sustainable battery cells for our pure electric cars,” said Volvo Car Group CEO Håkan Samuelsson. “Working closely with Northvolt will also allow us to strengthen our in-house development capabilities.”

Volvo and Northvolt’s gigafactory will be powered by 100 percent clean energy and are expected to employ 3,000 people. Although the plant’s location hasn’t been decided yet, Volvo has announced that the first vehicle to use the new batteries will be the third-generation XC60, which will be fully electric. This partnership is also key to Volvo’s goal of producing strictly electric vehicles by 2030 and Polestar’s European growth strategy and its Project 0 initiative, which aims to create a climate-neutral vehicle by 2030.

“Volvo Cars and Polestar are industry leaders in the transition to electrification and perfect partners on the journey ahead as we aim to develop and produce the world’s most sustainable battery cells,” said Peter Carlsson, Northvolt’s CEO, and co-founder. “We are proud to become their exclusive battery cell production partner in Europe.”

Henrik Green, chief technology officer at Volvo cars, noted that designing batteries in-house allows the brand to calibrate them specifically for their vehicles. “With cells developed in-house for our electric cars we can focus on giving Volvo and Polestar customers what they want, such as range and short charging times,” added Green.

Volvo Car Group’s planned joint venture with Northvolt expands Europe’s battery supply chain. This ensures a cost-effective and efficient source of batteries that are sustainably manufactured. Both companies haven’t finalized their partnership yet and are still subject to final negotiations and approval from their respective boards.

Currently, Volvo sells the XC40 Recharge as its only battery-electric vehicle in the U.S. It uses the CMA platform shared with the internal combustion version and the Polestar 2. The XC40 Recharge and Polestar 2 are good for 208- and 233 miles respectively. A single-motor variant of the latter arrives later this year with an estimated range of 260 miles. The 2022 Volvo C40 Recharge, which is essentially the XC40’s coupe-y sibling, joins the lineup next year and is expected to get an estimated range of 210 miles.

A new platform specifically for EVs will arrive in 2022. The U.S.-built Polestar 3 will be the first vehicle on this architecture and we expect the third-generation Volvo XC60 will also be on this new architecture. We suspect the Polestar 3 will also be the first vehicle to get batteries codeveloped with Northvolt. Every Volvo and Polestar vehicle will use the Android Automotive operating system starting with the 2022 model year.

Volvo Car Group will announce more details on June 30 at Volvo Cars Tech Moment.

Written by Stefan Ogbac
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