Volvo Cars and Northvolt have selected Gothenburg to establish a new battery manufacturing plant, which will start operations in 2025, create up to 3,000 jobs and complement the planned R&D centre both companies announced in December as part of an investment of around SEK30bn (US$3.3bn).

Construction of the plant will start in 2023 and will produce battery cells specifically developed for use in next-generation pure electric Volvo and Polestar cars.

The plant will have a potential annual cell production capacity of up to 50 gigawatt hours (GWh), which would supply batteries for approximately half a million cars per year.

Northvolt maintains the Swedish location of the plant, which will be built in Torslanda, Gothenburg, offers benefits in terms of a direct route into Volvo’s largest car plant, access to infrastructure, a strong pipeline of renewable energy supply and relevant job competences, as well as its proximity to both companies’ R&D units.

“Our battery cell partnership with Northvolt is key to our strategic ambitions in electrification,” said Volvo Cars chief executive, Håkan Samuelsson.

“We are committed to becoming a leader in the premium electric car segment and selling only pure electric vehicles by 2030.”

For his part, Northvolt co-founder and CEO, Peter Carlsson, added: “Establishing this gigafactory in Gothenburg is a decisive move, both to continue to transform one of the most dynamic automotive regions in the world and to become the leading global supplier of sustainable batteries.”

The plant will be powered by fossil-free energy with focus on driving renewable capacity in the region and will integrate engineering solutions which prioritise circularity and resource efficiency.

Battery production for Volvo Cars’ and Polestar’s fully electric models represents a large part of each car’s total life cycle carbon emissions. By working with Northvolt and producing batteries near its manufacturing facilities in Europe, Volvo Cars and Polestar can reduce the environmental footprint attributable to battery sourcing and production for their future cars.

“Our new battery plant will support our ambition to have a fully climate neutral manufacturing network and secure a supply of high-quality batteries for years to come,” noted head of engineering and operations at Volvo Cars, Javier Varela.

“Through our partnership with Northvolt, we will also benefit greatly from an end-to-end battery value chain, from raw material to complete car, ensuring optimal integration in our cars.”

The battery cell production joint venture between Northvolt and Volvo Cars will represent one of the largest cell production units in Europe, says the supplier. Volvo Cars and Northvolt have appointed former Tesla executive, Adrian Clarke, to lead the production company.

The R&D centre, which will become operational in 2022, will create a few hundred jobs in Gothenburg.

The partnership will focus on developing tailor-made batteries and vehicle integration concepts. Establishing deep vertical integration of battery development and production is important for Volvo Cars and Polestar, since the battery represents the largest individual cost component in an electric car, as well as a major part of the carbon footprint.

Taken together, the new battery plant and R&D centre will need a range of competences and the joint venture company is recruiting engineers and team leaders to advance the project.

Large scale recruitment of operators and technicians will start in late 2023.