Volvo and Northvolt to build gigafactory in Sweden with a former Tesla exec in charge

February 7, 2022: -Volvo Cars and Northvolt said Friday they would build a battery manufacturing plant in Gothenburg, Sweden, with construction set to start in 2023.

According to the companies, the facility is set to “have a potential annual cell production capacity of up to 50-gigawatt hours.” They said this would equate to supplying enough batteries for around 500,000 cars every year.

The batteries produced by the plant will be “specifically developed” so they can be used in completely-electric cars from Volvo and Polestar, which is joint-owned by Volvo Cars and China’s Geely Holding Group.

The gigafactory in Gothenburg will dovetail with a planned research and development center announced in December 2021 as part of an investment of almost 30 billion Swedish kronor, or $3.29 billion.

Gigafactories are facilities that produce batteries for electric vehicles on a large scale. Tesla CEO Elon Musk has been credited as coining the term.

“The battery cell production joint venture amid Northvolt and Volvo Cars will be a huge player in European battery cell production and represent one of the biggest cell production units in Europe,” the companies said in statements published on their websites on Friday.

“Volvo Cars and Northvolt have appointed former Tesla executive Adrian Clarke to lead the production company,” they added.

Plans to create a battery plant were announced in December, but a specific location was not confirmed at the time. The R&D center is starting operations this year, with the battery production facility scheduled to be up and running in 2025.

Northvolt is a Stockholm-headquartered company that was founded in 2016. It has attracted investment from Goldman Sachs and Volkswagen, among others, aiming for 150 GWh of cell output per year by 2030. In March 2021, Volvo Cars said it wanted to become a “fully electric car company” by 2030.

During a question and answer session on Friday, Northvolt CEO Peter Carlsson and Javier Varela, Volvo Cars’ head of engineering and operations, were asked if the joint venture would expand to parts of the world like Asia and America.

He said this meant that there would be a regionalization of the supply chain. “That’s the reality that we need to continue exploring.”

Friday’s announcement comes at the weekend. The European Automobile Manufacturers’ Association said 878,432 new battery-electric passenger cars were registered in the EU in the previous year, compared to 538,734 in 2020.

The market share for battery electric vehicles for new passenger cars stood at 9.1% in 2021. Despite registrations for new gasoline and diesel vehicles decreasing, the ACEA said: “conventional fuel types still dominated EU car sales in terms of market share in 2021, accounting for 59.6% of all recent registrations.”