Joint Venture Between Volvo And Northvolt - New Joint Battery Manufacturing Plant Will Be Built In Gothenburg

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The new 50-gigawatt-hour (GWh) plant will employ up to 3,000 people and produce battery cells designed exclusively for use in Volvo and Polestar's next-generation pure electric vehicles.

The Northvolt chief executive officer Peter Carlsson said that the establishment of the gigafactory in Gothenburg would help transform one of the most dynamic automotive regions globally and become the leading global supplier of sustainable batteries.

The first move for the new jointly owned company will be a battery research and development centre because last year, both Swedish-based firms said they would establish a joint venture to develop batteries for electric cars, including setting up a gigafactory for production and an R&D centre, with a total investment of about 30 billion Swedish crowns ($3.3 billion).  

The new plant is expected to open in 2025, according to Volvo Cars and Northvolt, whose largest shareholder is Volkswagen. Meanwhile, Volvo, which is now majority-owned by Chinese conglomerate Geely Holding, aims to sell half-electric cars by the middle of this decade and fully electric vehicles only by 2030.

There will be two stages of construction for the battery factory in which detailed planning is currently underway for phase one, consisting of 55 hectares of land. The location is already a national priority for industrial production and has existing infrastructure, simplifying planning.  

Northvolt has acquired over $30 billion worth of contracts from customers such as BMW, Fluence, Scania, Volkswagen, Volvo Cars and Polestar, the gigafactory in the Swedish town of Skelleftea assembled its first battery cell at the end of December.

The Gothenburg location has several advantages, including direct access to Volvo Cars' largest car plant, infrastructure, a strong renewable energy supply pipeline, and essential experience, as well as proximity to both Volvo Cars' and Northvolt's R&D departments.

Both Volvo Cars and Northvolt have praised each other's commitment to sustainability. In keeping with that ethos, the new plant will run on fossil-free energy, emphasising expanding the region's renewable energy potential and incorporating technical solutions that prioritise circularity and resource efficiency.

Battery production accounts for a large portion of each car's overall life cycle carbon emissions, according to Volvo Cars and Polestar. Volvo Cars and Polestar can lower the environmental impact of battery procurement and production for future cars by collaborating with Northvolt.