Swedish automotive giant Volvo Car Group announced on Monday plans to form a joint venture with leading Swedish battery company Northvolt which will see the two develop and produce more sustainable batteries and a potential 50GWh gigafactory.
First out of the gates for the newly announced 50/50 joint venture will be a research and development centre to be located in Sweden which is expected to begin operations in 2022.
The two companies hope to join forces to develop and produce more sustainable batteries that will be tailored to power the next generation of pure electric Volvo and Polestar vehicles.
The joint venture will also look to establish a new gigafactory somewhere in Europe, with what initial reports suggest could boast potential production capacity of up to 50GWh per year, and production scheduled to start in 2026.
Expected to be powered 100% by renewable electricity and able to employ around 3,000 people, the location of the new gigafactory is yet to be decided, but it is expected that the first car to feature battery cells developed through the new joint venture will be the electric successor to Volvo Cars’ best-selling XC60 model.
“By working with Northvolt we will secure a supply of high-quality, more sustainable battery cells for our pure electric cars,” said Håkan Samuelsson, chief executive at Volvo Car Group.
“Working closely with Northvolt will also allow us to strengthen our in-house development capabilities.”
As part of the plans announced on Monday, Volvo Car Group will also look to source 15GWh of battery cells per year from the existing Northvolt Ett battery plant in Skellefteå, Sweden, starting in 2024.
This new supply agreement with Northvolt will underpin Volvo’s ambitious electrification plans, which inge on plans to sell 50% pure-electric vehicles by 2025, and 100% 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, Co-Founder and CEO of Northvolt.
“We are proud to become their exclusive battery cell production partner in Europe.”
Volvo Car Group currently reports that the production of batteries for its vehicles serves as a large part of the vehicle’s total lifecycle carbon emissions.
Thus, by partnering with Northvolt – a leader in sustainable battery production, which produces batteries near Volvo’s own manufacturing facilities in Europe – Volvo hopes it will be able to reduce the environmental footprint attributed to the batteries needed for its vehicles.
The newly announced partnership with Northvolt, then, serves as an integral part of Volvo’s plans for becoming a leader in the premium electric car segment, and represents an important step in the company’s in-house development abilities.
Meanwhile, for Volvo’s electric vehicle subsidiary Polestar, it opens the door to further expand its European growth and underlines its commitment to producing a truly climate neutral vehicle by 2030.
“Developing the next generation of battery cell technology in-house, together with Northvolt, will allow us to design batteries specifically for Volvo and Polestar drivers,” added Henrik Green, chief technology officer at Volvo Cars. “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.”
“Collaborating with Northvolt is an important step for our industrial network as we move towards all-out electrification by 2030,” said Javier Varela, head of industrial operations and quality. “Batteries are one of the most important parts in a fully electric car, and by partnering with Northvolt we ensure an efficient and cost-effective supply chain of high-quality and sustainable batteries in Europe.”
Already this year Northvolt has acquired US-based battery technology company Cuberg, supporting the company’s plans to scale up the company’s lithium metal battery technology so as to start selling battery cells in 2025 that exceed 1,000-watt hours a litre, a new benchmark in energy density.
Similarly, Northvolt’s acquisition of Cuberg will expand the company’s operations into North America, where Cuberg will lead Northvolt’s US operations in developing next-generation battery cells for the electromobility market.
And earlier this month, Northvolt concluded a $US2.75 billion ($A3.55 billion) investment round from investors including Goldman Sachs and Volkswagen. The influx of cash will supercharge the company’s battery production capabilities.
Northvolt already announced that it will expand the annual production capacity of its first gigafactory, Northvolt Ett, in Skellefteå, Sweden, from 40GWh to 60GWh. This will be followed by the completion of Northvolt Zwei, which is expected to enter operations in 2024 with an annual production output of over 20GWh.
At the same time, Northvolt now expects to build a further two European gigafactories this decade so as to meet its 2030 capacity target of 150GWh+, and is already looking at building the next of these gigafactories in Germany.
“We have been producing cells at our cell industrialization facility, Northvolt Labs, for more than a year and are excited to now bring the knowledge and technology we have developed to the north and start large-scale production,” said Peter Carlsson, Co-Founder and CEO of Northvolt.
“We have a solid base of world-class investors and customers on-board who share Northvolt’s mission of building the world’s greenest battery to enable the European transition to renewable energy.”