Volvo Cars and Northvolt announced the building of a new battery production factory in Gothenburg, Sweden, which is slated to start construction in 2023.
The plant will, according to the firms, “have a potential yearly cell production capacity of up to 50-gigawatt hours.” According to them, this would equate to delivering enough batteries for about 500,000 cars per year.
The plant’s batteries would be “particularly built” for use in Volvo and Polestar fully electric cars, which are jointly owned by Volvo Cars and China’s Geely Holding Group.
The so-called gigafactory in Gothenburg will work in tandem with a planned research and development facility, which was announced in December 2021 as part of a $3.29 billion investment in Sweden.
Gigafactories are large-scale production facilities for electric car batteries. Elon Musk, the CEO of Tesla, is largely credited with coining the term.
“The battery cell production joint venture between Northvolt and Volvo Cars will be a significant player in European battery cell production and will represent one of the largest cell production units in Europe,” the companies said in statements published on their websites on Friday.
“Volvo Cars and Northvolt have appointed former Tesla executive Adrian Clarke to lead the production company,” they added.
In December, plans to build a battery plant were announced, although no precise location was specified. The R&D centre is expected to open this year, with the battery manufacturing facility expected to open in 2025.
Volvo Cars said in March 2021 that it will become a “totally electric automobile company” by 2030. Northvolt is a startup based in Stockholm that was created in 2016. It has received funding from Goldman Sachs and Volkswagen, among others, and plans to produce 150 GWh of cell energy annually by 2030.
Northvolt CEO Peter Carlsson and Javier Varela, Volvo Cars’ head of engineering and operations, were questioned if the joint venture will expand to other parts of the world, such as Asia and America, during a question and answer session.
Varela stressed that it was a step-by-step procedure. “Today it’s clear that we are focusing on our European needs and [it’s] to be discussed in the future how we will secure capacity in other areas,” he said.
“Obviously, from day one we have had a big European focus and our infrastructure is here. But it’s … also pretty clear that the electrification platforms are really becoming global and the rollout of product portfolios … [is] becoming globalm” Carlsson said.
“However, batteries are heavy to ship and they’re also, to some extent, a bit complicated in terms of logistics since there … [are] certain hazardous goods requirements when you ship batteries.”
He explained that this meant the supply chain will be regionalized. “That is also the reality for us, and we must continue to explore.”
The companies’ latest announcement comes at the end of a week in which the European Automobile Manufacturers’ Association reported that 878,432 new battery-electric passenger cars were registered in the EU last year, compared to 538,734 in 2020, according to the European Automobile Manufacturers’ Association.
In 2021, battery electric vehicles had a 9.1 percent market share for new passenger automobiles. Despite the fact that new gasoline and diesel vehicle registrations are declining, the ACEA reports that “conventional fuel types still dominated EU car sales in terms of market share in 2021, accounting for 59.6% of all new registrations.”
(Adapted from CNBC.com)