Volvo is to establish a joint venture with Northvolt to develop and produce more sustainable batteries, to power the next generation of pure electric Volvo and Polestar cars.
As a first step for the 50/50 joint venture, Volvo Car Group and Northvolt aim to set up a research and development centre in Sweden, which will start operations in 2022.
The centre is intended to build on battery experience in both companies and develop cells and vehicle integration technologies, specifically developed for use in Volvo and Polestar cars.
The joint venture will also establish a new gigafactory in Europe, with a potential capacity of up to 50 gigawatt hours (GWh) per year. Production is scheduled to start in 2026.
As part of the plans, Volvo also looks to source 15 GWh of battery cells per year from the existing Northvolt Ett battery plant in Skellefteå, Sweden, starting in 2024.
Volvo aims to sell 50% pure electric cars by the middle of this decade and by 2030, it intends to sell only fully electric cars.
Today, the production of batteries for Volvo Car Group’s fully electric cars represents a large part of the car’s total lifecycle carbon emissions. By working with Northvolt and producing batteries near its manufacturing facilities in Europe, Volvo is looking to reduce the environmental footprint attributable to battery sourcing and production.
“By working with Northvolt we will secure a supply of high-quality, more sustainable battery cells for our pure electric cars,” said Volvo chief executive, Håkan Samuelsson
“Working closely with Northvolt will also allow us to strengthen our in-house development capabilities.”
The new gigafactory, planned to be powered by 100% clean energy, is expected to employ around 3,000 people. The location of the new plant is yet to be decided. The first car to feature battery cells developed through the joint venture will be the electric successor to Volvo’s XC60.
“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,” added Northvolt co-founder CEO, Peter Carlsson.
Volvo will reveal more details on its future technology roadmap at the Volvo Cars Tech Moment, to be held on 30 June.
The partnership and joint venture are subject to final negotiation and agreements between the parties, including board approval.