Volvo and Northvolt announce £2.5bn investment in EV battery factory

Volvo has announced plans to open an electric vehicle battery research and development centre in Gothenburg next year.

The Swedish car manufacturer has teamed up with battery supplier Northvolt to invest SEK30 billion (£2.5bn) in the factory.

The pair announced a partnership earlier this year, but have now signed a binding agreement to develop and sustainably produce batteries for the next generation of Volvo’s EVs.

Volvo says its goal for the partnership is to develop tailor-made batteries that provide a long range and fast charging times

The company also wants to create a system that sees it develop and build the batteries itself for two key reasons. The first is that the battery is the largest cost in the production of an EV, but also a major part of its carbon footprint.

Once the centre is complete, a new manufacturing plant will be built at an undisclosed location in Europe. Here, the state-of-the-art battery cells designed specifically for use in cars will be made.

This new factory will have a capacity of up to 50GWh per year, supplying batteries for around half a million cars each year when production begins in 2023.

Volvo Cars CEO Håkan Samuelsson said: “Our partnership with Northvolt secures the supply of high-quality, sustainably produced batteries for the next generation of pure electric Volvos.

“It will strengthen our core competencies and our position in the transformation to a fully electric car company.”

Peter Carlsson, CEO for Northvolt, added: “Volvo Cars is an excellent partner on the road towards building up a supply of battery cells that are made in Europe with a very low carbon footprint, and that are optimised through vehicle integration to get the best performance out of the next-generation EVs.”