Volvo Launches Sustainable Battery Partnership

Volvo Cars will partner with Swedish battery maker Northvolt to develop and produce more sustainable batteries to power both Volvo and Polestar electric vehicles (EVs).

As a critical step in the rollout of its fleet-wide electrification plan, Volvo Cars (Volvo) has announced a 50/50 joint venture with Swedish battery company, Northvolt. The partnership's focus is the development and production of more sustainable batteries to power both Volvo and Polestar electric vehicles (EVs).

According to the new agreement, the two companies will operate a research and development center in Sweden beginning in 2022. The team also plans to open a new European Gigafactory in 2026, with a potential capacity of up to 50-gigawatt hours (GWh) per year.

By leveraging the expertise of both teams, the companies will work together to develop new state-of-the-art battery cells. In addition, they aim to create new battery-to-vehicle integration technologies specifically for Volvo and Polestar vehicles. This, according to Henrik Green, Chief Technology Officer at Volvo Cars, will mean great things for consumers. "With cells developed in-house for our electric cars," Green explained, "we can focus on giving Volvo and Polestar customers what they want, such as range and short charging times."

Starting in 2024, Volvo will also source 15 GWh of battery cells per year from Northvolt's Swedish battery plant to help power its fleet. This move is expected to help the automaker ensure its battery cell supply remains stable while it grows its all-electric fleet.

Volvo also expects its Northvolt venture to reduce its carbon footprint pertaining to battery sourcing and production. In traditional manufacturing, a lithium-ion battery can account for much of an EV's lifetime CO2 emissions. However, because Northvolt manufactures batteries using clean energy, its products have an 80% lower carbon footprint than batteries manufactured using coal power, according to the company.

According to Javier Varela, Head of Industrial Operations and Quality at Volvo Cars, this is an essential step for the company. "Batteries are one of the most important parts in fully electric cars," said Varela. "And by partnering with Northvolt, we ensure an efficient and cost-effective supply chain of high quality and sustainable batteries in Europe." Volvo Cars aims to make its global manufacturing network carbon by 2025.

The partnership between Volvo Car Group and Northvolt is pending final agreement and negotiations, including board approvals.

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