Volvo Car Group and Northvolt signed a binding agreement related to battery development and manufacturing partnership, announced first in June 2021.

R&D centre in Sweden

As part of a 30 billion SEK (€2.9 billion/$3.3 billion) investment, the two partners will establish a joint research and development (R&D) centre in Gothenburg, Sweden. It will become operational in 2022, with a few hundred jobs.

The main goal of the R&D will be to develop new battery cells, tailor-made for the next-generation pure electric Volvo and Polestar cars.

"The R&D centre will be in close proximity to Volvo Cars’ own R&D operations and to Northvolt’s existing innovation campus, Northvolt Labs, in Västerås, Sweden, ensuring synergies and efficiencies as it develops battery technologies."

Volvo Cars and Northvolt battery system
Volvo Cars Tech Moment: Battery and propulsion

Battery gigafactory in Europe

The second step of the partnership will be a joint venture battery gigafactory in Europe (the exact location is not yet announced).

The construction of the plant will start in 2023, with large-scale production in 2026, and the potential for up to 50 GWh of batteries per year - enough for approximately half a million cars per year, according to Volvo. The plant will employ up to 3,000 people.

"It will produce next-generation state-of-the-art battery cells, specifically developed for use in next-generation pure electric Volvo and Polestar cars."

"The partnership will focus on developing tailor-made batteries that give Volvo drivers what they want, such as range and quick charging times. Volvo Cars is working with Northvolt to create a true end-to-end system for batteries, whereby it develops and builds the batteries itself. This deep vertical integration is important since the battery represents the largest individual cost component in an electric car, as well as a major part of the carbon footprint."

It means that Volvo takes battery cell development and production basically in-house, just like previously with electric drive units.

Before that happens, Volvo will continue to use battery cells from external suppliers. As far as we know, the main supplier so far was LG Chem's LG Energy Solution.

Håkan Samuelsson, Chief Executive for Volvo Cars 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, Chief Executive for Northvolt said:

“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,”.

Volvo intends to produce and sell only battery-electric cars by 2030.


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