Volvo and Northvolt to build battery R&D centre in Gothenburg

Volvo and Northvolt to build battery R&D centre in Gothenburg


Volvo and battery development partner Northvolt will open a new research and development centre in Gothenburg next year, as the first step in a £2.5bn strategy to build batteries for future Volvo EVs. 

Volvo says the new site will create “a few hundred jobs”, and makes Volvo “one of the few automotive brands to make battery cell development and production part of its end-to-end engineering capabilities”.

The two firms have now signed a binding agreement to create a joint venture for the development and production of EV batteries, having announced plans for a partnership earlier this year. 

Work on a dedicated battery factory will begin in 2023 and begin operating at full capacity (50GWh per year) in 2026, eventually employing some 3000 people. The power units will be used in “the next generation of pure-electric Volvo and Polestar cars”, beginning with the successor to today’s XC60, which Volvo has now confirmed will be fully electric.

Volvo plans to initially source 15GWh of batteries per year from Northvolt’s existing Skellefteå facility from 2024 (when the XC60 EV is expected to be launched) before the new dedicated ‘gigafactory’ facility goes into service.

Volvo aims for 50% of its global sales to be pure-electric cars by the middle of this decade and will ditch combustion completely from 2030. Polestar, its all-EV sibling brand, plans to build “a truly climate-neutral vehicle” by 2030. 

The car maker says Northvolt’s “sustainable battery production” methods will help to reduce the environmental impact of ramping up EV production. 

The joint venture with Volvo will be Northvolt’s third with a mainstream passenger car brand. In 2019, Volkswagen took a 20% share in the Stockholm-based firm to build a gigafactory in Germany that is set to begin operations by early 2024, and in 2020, BMW agreed a battery supply deal with Northvolt worth €2 billion (£1.72bn).