Volvo, Northvolt to build new EV battery plant in Sweden

Automaker Volvo Cars and battery manufacturer Northvolt will build their joint battery plant in Gothenburg, western Sweden, the two companies said on Friday.

The new 50-gigawatt-hour (GWh) plant will create up to 3,000 jobs and make battery cells specifically developed for use in pure electric Volvo and Polestar cars, the Sweden-based companies said. Operations will begin in 2025.

The two companies said last year they would form a joint venture to develop batteries, including setting up a gigafactory for production and a research and development centre, a total investment of about 30 billion crowns ($3.3 billion). Northvolt and Volvo said former Tesla executive Adrian Clarke had been appointed to lead the production company.

"He comes with a long experience from Tesla as well as around how to build these type of factories," Northvolt CEO Peter Carlsson, who also previously worked for Tesla, told Reuters.

Volvo Cars head of engineering and operations, Javier Varela, said access to fossil-free energy, skills and infrastructure had been factors for choosing Gothenburg, Volvo's hometown.

Competition for talent is fierce, with most battery engineers based in Asia. Tesla and Asian companies such as LG and Samsung SDI are also setting up factories in Europe.

Northvolt's gigafactory in the Swedish town of Skelleftea assembled its first battery cell at the end of December, making it the first European company to design and manufacture a battery in Europe.

Carlsson said it was running as planned, although he said global supply-chain problems, semiconductor shortages and the COVID-19 had made it more of a challenge. "It has not been the easiest of times," he said.

Volvo Cars, majority-owned by China's Geely Holding, aims to sell 50% pure electric cars by the middle of this decade and fully electric cars only by 2030.

Northvolt, whose biggest shareholder is Volkswagen, has so far received more than $30 billion worth of contracts from customers such as BMW, Fluence, Scania, Volkswagen, Volvo Cars and Polestar.

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