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A new joint venture will help speed up Volvo’s electrification plans.

Kevin Clemens

June 30, 2021

3 Min Read
2021 Polestar 2Polestar

Volvo Car Group has announced plans for a joint venture with the leading Swedish battery company Northvolt to develop and produce lithium-ion batteries to power electric Volvo and Polestar models. Volvo Cars has been under the ownership of the Chinese company Zhejiang Geely Holding since 2010, and Polestar is a premium electric performance car brand founded by Volvo Cars and Geely Holding, established in 2017.

Northvolt is a European supplier of lithium-ion battery cells and systems and was recently mentioned as a partner with Volkswagen in its electrification efforts. Northolt’s mission is to deliver the world’s greenest lithium-ion battery with a minimal CO2 footprint. As a first step for the 50/50 joint venture, Volvo Car Group and Northvolt are planning to set up a research and development center in Sweden that will begin operations in 2022.

The intent is to “build on the battery expertise within both companies and develop next-generation, state-of-the-art battery cells and vehicle integration technologies, specifically developed for use in Volvo and Polestar cars,” according to a Volvo news release.  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.

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The new gigafactory, planned to be powered by 100 percent 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 Cars’ best-selling XC60 model.

“By working with Northvolt we will secure a supply of high-quality, more sustainable battery cells for our pure electric cars,” said Håkan Samuelsson, chief executive at Volvo Car Group. “Working closely with Northvolt will also allow us to strengthen our in-house development capabilities.” Volvo Cars aims to sell 50 percent pure electric cars by the middle of this decade, and by 2030 it aims to sell only fully electric cars.

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By producing batteries near its manufacturing facilities in Europe, Volvo Car Group can reduce the environmental footprint attributable to battery sourcing and transportation for its future cars. Volvo Car Group will source 15 GWh of battery cells per year from the existing Northvolt Ett battery plant in Skellefteå, Sweden starting in 2024.

“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,” said Peter Carlsson, Co-Founder, and CEO of Northvolt. “We are proud to become their exclusive battery cell production partner in Europe.”

Related:Northvolt Acquires Battery Innovator Cuberg

For EV startup Polestar, the plans will boost its European growth ambitions.“ Collaborating with Northvolt is an important step for our industrial network as we move towards all-out electrification by 2030,” said Javier Varela, head of industrial operations and quality for Polestar. “Batteries are one of the most important parts in a fully electric car, and by partnering with Northvolt we ensure an efficient and cost-effective supply chain of high-quality and sustainable batteries in Europe.”

The partnership and joint venture are subject to final negotiation and agreements between the parties, including board approval.

Kevin Clemens is a Senior Editor with Battery Technology.

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