Volvo has detailed plans for a 50:50 joint venture with Swedish battery start-up Northvolt, with the aim of building an EV battery factory in Europe by 2026.
The power units will be used in "the next generation of pure-electric Volvo and Polestar cars", beginning with the successor to today's XC60, which Volvo has now confirmed will be fully electric.
Volvo plans to initially source 15GWh of batteries per year from Northvolt's existing Skellefteå facility from 2024 (when the XC60 EV is expected to be launched) before the new dedicated 'gigafactory' facility goes into service with a targeted annual output of 50GWh.
Volvo aims for 50% of its global sales to be pure-electric cars by the middle of this decade and will ditch combustion completely from 2030. Polestar, its all-EV sibling brand, plans to build "a truly climate-neutral vehicle" by 2030.
The car maker says Northvolt's "sustainable battery production" methods will help to reduce the environmental impact of ramping up EV production.
The new factory, the location of which has yet to be decided, is planned to be powered entirely by renewable energy and will employ 3000 people.
The joint venture with Volvo will be Northvolt's third with a mainstream passenger car brand. In 2019, Volkswagen took a 20% share in the Stockholm-based firm to build a gigafactory in Germany that is set to begin operations by early 2024, and in 2020, BMW agreed a battery supply deal with Northvolt worth €2 billion (£1.72bn).
Further details on Volvo's EV strategy and battery production plans will be unveiled at its 'Volvo Cars Tech Moment' event on 30 June.