Volvo Cars, Northvolt to build gigafactory in Gothenburg

A Volvo XC40 Recharge car or truck on screen at the 38th Thailand Intercontinental Motor Expo 2021.

Peerapon Boonyakiat /SOPA Visuals | LightRocket | Getty Visuals

Volvo Cars and Northvolt said Friday they would build a battery manufacturing plant in Gothenburg, Sweden, with development set to get started in 2023.

In accordance to the providers, the facility is set to “have a probable annual cell output capacity of up to 50 gigawatt several hours.” This would equate to giving enough batteries for all over 500,000 automobiles each and every year, they explained.

The batteries developed by the plant will be “precisely made” so they can be used in thoroughly-electric powered vehicles from Volvo and Polestar, which is joint owned by Volvo Cars and trucks and China’s Geely Keeping Team.

The so-identified as gigafactory in Gothenburg will dovetail with a planned exploration and progress heart that was declared in December 2021 as part of an expenditure of roughly 30 billion Swedish krona, or $3.29 billion.

Gigafactories are services that deliver batteries for electrical vehicles on a huge scale. Tesla CEO Elon Musk has been commonly credited as coining the time period.

“The battery cell manufacturing joint enterprise in between Northvolt and Volvo Vehicles will be a important player in European battery mobile manufacturing and will depict just one of the greatest mobile generation units in Europe,” the organizations reported in statements released on their internet websites on Friday.

“Volvo Vehicles and Northvolt have appointed previous Tesla executive Adrian Clarke to lead the output firm,” they included.

Options to develop a battery plant were announced in December, but a particular locale was not verified at the time. The R&D heart is due to start functions this yr, with the battery production facility scheduled to be up and operating in 2025.

Go through far more about electric powered motor vehicles from CNBC Professional

In March 2021, Volvo Cars and trucks said it planned to become a “entirely electric motor vehicle corporation” by the 12 months 2030. Northvolt is a Stockholm-headquartered firm which was started in 2016. It has attracted investment from Goldman Sachs and Volkswagen, amongst other folks, and is aiming for 150 GWh of mobile output for each 12 months by 2030.

Throughout a query and response session on Friday, Northvolt CEO Peter Carlsson and Javier Varela, Volvo Cars’ head of engineering and functions, ended up requested if there would be an expansion of the joint undertaking to areas of the earth this sort of as Asia and America.

Varela emphasised it was a stage by phase course of action. “These days it can be very clear that we are concentrating on our European wants and [it’s] to be talked over in the future how we will safe capacity in other regions,” he reported.

For his aspect, Carlsson stated: “Clearly, from day one particular we have experienced a significant European focus and our infrastructure is right here. But it really is … also quite clear that the electrification platforms are definitely turning out to be world-wide and the rollout of product or service portfolios … [is] getting world wide.”

“Nevertheless, batteries are major to ship and they’re also, to some extent, a little bit sophisticated in phrases of logistics given that there … [are] specific hazardous merchandise needs when you ship batteries.”

This meant that there would be a regionalization of the source chain, he claimed. “That’s the actuality, also for us, that we need to have to carry on checking out.”

Friday’s announcement arrives at the close of a 7 days in which the European Auto Manufacturers’ Affiliation claimed 878,432 new battery electrical passenger cars and trucks have been registered in the EU very last yr, as opposed to 538,734 in 2020.

For new passenger vehicles, the industry share for battery electrical cars stood at 9.1% in 2021. Even with registrations for new gasoline and diesel autos falling, the ACEA stated “standard fuel forms nevertheless dominated EU motor vehicle product sales in terms of sector share in 2021, accounting for 59.6% of all new registrations.”