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The battery factory: Why We Chose Gothenburg

21 June 2022
Volvo Cars and Northvolt join forces to develop and manufacture high-efficiency batteries in Gothenburg. The SEK 30 billion investment in a new battery factory and a development center will provide up to 3,000 new jobs.

“We are experiencing one of the largest and most rapid industrial changes in modern times with the electrification of everything from vehicles to aviation and shipping. In the next 6–7 years, electrification will impact all walks of life, and demand for battery cells will explode,” says Erik Severinson, Strategy Manager at Volvo Cars.

Together with Northvolt, Volvo Cars expect to initially produce battery cells for 300,000 cars per year at the new plant. At the same time, Volvo has secured deliveries from Northvolt’s Skellefteå factory and a number of other suppliers to cover the rest of the need.

“Time is a crucial factor for us. We currently sell 700,000 cars per year and are growing fast. When we switch from combustion technology to electric power throughout production, the availability of competitive battery cells is crucial for us to be able to meet demand. The partnership with Northvolt is a perfect match to secure the supply of battery cells and drive the develop-ment towards cheaper and more efficient battery solutions,” continues Severinson.

The cooperation between Volvo Cars and Northvolt has been smooth over the last 18 months. A number of locations were evaluated along the way and the choice fell on Gothenburg for several reasons.

“An important aspect was that the Gothenburg region is a well-established and leading vehicle cluster and has access to the right type of expertise for such a large and technically advanced investment,” says Anders Thor, responsible for public relations at Northvolt.

“In Gothenburg, there is an enormous engineering and operator competence in the automotive industry that was easily leveraged to meet our needs. There is also a tradition of working with competence development in step with the development of the industry. This means that we can also relatively quickly pro-duce the next generation of experts in battery development and battery production.”

Erik Severinson and Anders Thor also highlight the logistics situation in the middle of one of Europe’s most dynamic vehicle clusters as a vital factor for the location of the factory and development center.

“The good logistics location with only a couple of kilometers to the Nordic region’s largest port and proximity to the automotive industry are strong arguments for Gothenburg. Battery production requires complex logistics and the conditions for this are extremely good here,” continues Severinson.

One of the major challenges in connection with the establishment was to secure the supply of cheap renewable energy.

“Sweden has come a long way in the transition to renewable energy, but capacity must be greatly expanded to meet the needs that exist in society as a whole to cope with climate change. To minimize the carbon footprint of  a battery, they need to be produced on 100  percent fossil-free energy, so we need to be  able to quickly scale up the energy supply for us, for other industries, and for households  in Gothenburg,” says Severinson.

Right now, planning is underway for the  construction of the giant battery factory right next to Volvo’s car factory in Torslanda.

“The Swedish construction process is a challenge, but we have a well-functioning collaboration with the city, the region, and the state to get all the puzzle pieces in place at the right time. For the Swedish export industry, it is critical to be able to get this type of project and it is in the interest of society as a whole that we succeed.”

Text: Sven-Eric Lindberg

Images: Northvolt/Volvo Cars

Dramatic development

In 2025, the first battery cells will roll out from Volvo Cars and Northvolt’s jointly owned factory in Gothenburg. The following year, the first Volvo cars with the new battery cells will be launched on the market.

Battery cells are getting smaller and more effective. In the coming years, the expected and dramatic developments of battery cell technology will also require large-scale solutions for recycling the valuable metals in them.

The text was originally published in Gothenburg Magazine 2022

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