Volvo secures ‘multi-billion dollar battery supply deals’ to support its electric car plans
Volvo, both through Polestar and its own brand, plans to bring several new all-electric vehicles to market and in order to do that, it needs significant battery supply.
The automaker now says that it has secured ‘multi-billion dollar battery supply deals’ with CATL and LG Chem.
According to a press release issued earlier today, Volvo Car Group signed contracts with CATL, China’s biggest battery maker, LG Chem, the Korea-based battery cell manufacturer, to buy several billion dollar worth of battery cell and modules for ” all models on the upcoming SPA2 and the existing CMA modular vehicle platforms.”
Håkan Samuelsson, president and CEO of Volvo Cars, commented on the announcement:
“The future of Volvo Cars is electric and we are firmly committed to moving beyond the internal combustion engine. Today’s agreements with CATL and LG Chem demonstrate how we will reach our ambitious electrification targets.”
Martina Buchhauser, senior vice president for procurement at Volvo Cars, said that the deals should secure battery supply for them through the next decade:
“With today’s agreement we effectively secured our battery supply for the upcoming decade. By having two suppliers available in each region we also ensure that we have flexibility in our supply chain going forward.”
Volvo currently doesn’t have a fully electric vehicle, but it’s expected to soon bring to market an all-electric XC40 compact SUV.
The company also relaunched its Polestar performance brand as an electric vehicle brand with a factory in China.
The automaker says that its “first battery assembly line is currently under construction at its manufacturing plant in Ghent, Belgium” and “it will be finalized by the end of this year.”
It will supply battery packs to its Compact Modular Architecture (CMA), which currently underpins the XC40, as well as the fully electric Polestar 2 fastback and several models sold by LYNK & CO, Volvo’s sister brand which it co-owns with Geely, Volvo’s parent company.
The company says that by the end of this year, “all three models will be built on a single production line at a Volvo-operated manufacturing plant in Luqiao, China.”
As we often like to highlight on Electrek, battery cell supply is where commitments to mass produce all-electric vehicles start and therefore, this news is a good sign for Volvo’s EV production.
That said, “multi-billion dollar battery supply deals” over “a decade” doesn’t tell us much about the planned production capacity.
$2 billion in battery cells over a decade wouldn’t be much. $8 billion would represent some decent production capacity.