Volvo signs multi-billion dollar EV battery supply deal

Volvo XC40

An electric XC40 will launch later this year

Deal promises battery supply for next decade as Swedish firm forges ahead with electrification strategy

Volvo has bolstered its electrified model roll-out by signing long-term deals with battery makers CATL and LG Chem in a move set to “ensure the multi-billion dollar supply of lithium ion batteries over the coming decade for Volvo and Polestar models,” said the car maker. 

Volvo announced in 2017 that, from this year, all of its new models would be electrified. It also wants 50 per cent of its global sales to be electric cars by 2025. 

This agreement with CATL of China and LG Chem of South Korea will help secure that goal, and comes ahead of Volvo launching its first electric car later this year, a zero-emission variant of the existing XC40 compact SUV

The issue of battery supply is crucial for car makers as the industry forges ahead with electrification: in the last 18 months, a number of manufacturers are understood to have faced supply shortages forcing electric vehicle delays. 

This deal covers battery supply for the next generation of Volvo’s larger models, such as the XC60 and XC90, which will be built on a new SPA2 platform as well as cars on the maker’s existing CMA platform used in smaller models such as the XC40 and Polestar 2.  

 “The future of Volvo Cars is electric and we are firmly committed to moving beyond the internal combustion engine,” said Håkan Samuelsson, Volvo CEO. “Today’s agreements with CATL and LG Chem demonstrate how we will reach our ambitious electrification targets.”

Volvo’s first battery assembly line will launch before the end of the year at Volvo’s plant in Ghent, Belgium where the electric XC40 will be built. Plug-in hybrid variants of the XC40 are already underway on the line.

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Source: Autocar Online

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