Volvo and Northvolt open new £2.5 billion EV battery R&D facility

The two Swedish companies will work collaboratively to develop and produce Volvo’s next-generation CO2-conscious battery packs

Volvo and Northvolt, the Swedish EV battery manufacturer, have signed a 30 billion SEK (roughly £2.5 billion) partnership that will see the pair launch a new battery research and development centre in Gothenburg in 2022.

The technology centre is strategically placed between Volvo’s own R&D hub and Northvolt’s innovation campus in Västerås, Sweden, to allow the two firms to easily work collaboratively and to ensure any research breakthroughs can be quickly put into production.

Volvo and Northvolt’s new facility will lay the foundations for the carmaker’s next-generation electric cars. The ultimate aim for the project is to produce new cells that offer drivers more range and faster charging times.

Volvo also plans to have Northvolt teach it how to set up its own end-to-end battery production scheme, which will ultimately save the company money by removing the costs associated with hiring external consultants.

The carmaker also expects its new internal battery production scheme will help reduce the carbon footprint of its cars, as the company will soon take complete charge of its own supply chain and manufacturing process. That means Volvo can more closely monitor its emissions.

Shortly after this research and development centre opens for business, Volvo and Northvolt will launch a new battery production centre. The location for the plant is yet to be confirmed, but the pair have already signed a binding agreement to break ground in 2023. 

Large scale production will start in 2026, creating 3,000 jobs for the area and supplying enough batteries for around 500,000 electric cars per year. The move also means Volvo will become the latest manufacturer to adopt the Tesla business model, moving its entire battery research and production operations in-house.

Volvo also says this new partnership will help it along the road to becoming an electric-only manufacturer by 2030. The firm also plans for 50 percent of its sales to come from electric cars by the middle of the decade.

Hakan Samuelsson, Volvo’s CEO, 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.”

Now click here for our review of the new, pure-electric Volvo C40 Recharge…

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