Seven effects of West Sweden's new battery industry

1. What production capacity is being built and what is to be manufactured?

Do we want to continue to depend on battery manufacturing in Asia, or do we want to stand on our own two feet? Do we want to reduce vulnerability in the supply chain and at the same time strengthen Sweden and Europe's position in the global economy? The answer from Volvo Cars and Northvolt is clear: we will develop and build our own batteries and it will be done on site in Sweden. That's why they created the joint company Novo Energy, whose buildings are now taking shape, right next to Volvo Cars' production plant in Torslanda, Gothenburg.

What will be manufactured here are battery cells for Volvo's electric cars. The battery cells must be assembled into finished battery packs in an adjacent facility owned and operated by Volvo Cars, before they are finally assembled in the cars.

In addition to the gigafactory, a unit for R&D is also being established in the mobility cluster at Lindholmen, Gothenburg. All in all, the investment is estimated to create jobs for 3,000 people. Approximately SEK 30 billion is being invested. The factory will have a 50 GWh capacity, which corresponds to batteries for about 500,000 cars per year.
At the same time, the start of construction for the Volvo Group's battery production plant in Mariestad, in western Sweden, is approaching. Here too, 3,000 jobs are estimated to be created and the production volume is stated at 300,000 tons per year, which corresponds to approximately 60 GWh. R&D within the Volvo Group takes place in Gothenburg
 

2. What type of expertise is needed and how is it built up?

To develop the world's best batteries for electric cars, there are really no ready-made solutions or technologies that we can pick off the shelf, but here it is very much about breaking new ground with significant investments in R&D.
Sweden's strength is that we were out so early. We have managed to attract a great deal of expertise and competence, which will become increasingly difficult to do in the future.

In addition to determination, lab technology and substantial investments, sharp minds with the right education and experience are needed. Novo Energy aims to employ 300 experts in its R&D centre in Gothenburg. So here is a window for people with the right profile, for people who want to join what Novo Energy describes as a "world-class team of technologists for R&D into next-generation battery cells".

Here are some examples of the knowledge needed:

• Material science: knowledge of new and existing materials that can increase the energy density, lifespan, and safety of batteries.
• Chemical Engineering: expertise in chemical processes and reactions. Knowledge of electrochemistry and thermodynamics.
• Electrical engineering: understanding how batteries are integrated with the car's electronic and electromechanical systems.
• Mechanical Engineering: skills in designing robust, highly efficient, and safe battery packs.
• Sustainability science: knowledge of how to minimize the environmental impact of production and maximize recycling when the battery has served its life.
• Data Science and AI: expertise in data analytics, machine learning and artificial intelligence to improve battery performance and lifespan.

Recruitment for the R&D centre has been ongoing since 2022. In order to also build new skills locally, students are offered summer jobs where they get to work alongside experienced experts at Novo Energy. The Volvo Group is also looking for competence in these areas.

3. How should the production staff be trained and in what field?

In West Sweden, over 7,000 people will eventually be needed who can work in battery production. That is more than the number of inhabitants in many Swedish municipalities.
The challenge here is that it is a new industry. This means that personnel with the right skills do not actually exist yet. Most people who will work in Novo Energy and the Volvo Group’s battery factories need to be trained.
The solution is a broad approach based on developing and adapting the institutions and opportunities for education and competence provision that already exist in the region. It involves efforts at all levels, both within companies and within the education system. Here is a selection of the efforts that are underway or planned:

• The companies' own training courses for existing employees
• Secure access to good learning environments for companies' own training and students
• Make it attractive to undertake education for work in the battery and automotive industry
• Increase the number of places in relevant programmes at upper secondary schools
• Expand the offering of vocational training at the city’s Labour Market and Adult Education Committee
• Ensure that relevant training within vocational colleges is planned and carried out
• Partner with universities for relevant educational offerings

In addition to this, a major investment is being made in a training centre, the Gothenburg Battery Centre, at Lindholmen in Gothenburg, with funding from the City of Gothenburg and the Västra Götaland region. The centre will open in January 2025 and will offer unique training environments where production employees can be trained in various stages of battery production. The centre will also be open to the public to stimulate curiosity, knowledge, and interest in work within the battery and automotive industry.
 

4. Direct effects from the construction of the facilities

The area used for Novo Energy's factory in Gothenburg is as large as 80 football fields. The building itself will be larger than the American defence headquarters, the Pentagon, which is the world's second largest office building. How big the Volvo Group's battery factory in Mariestad will be is not yet known, but everything points to the fact that it will also be big. Large buildings make an impact and produce effects on their surroundings.

Effect on traffic: Transportation of materials and 2,500 construction workers will result in higher traffic volumes during the construction period. A new wave of traffic will come once the factory is finished, when 3,000 people will get to and from work. A new public transport line that can help reduce the pressure of passenger cars on the roads is already underway to the new battery factory. The road network past the factories in Torslanda has also undergone expansion and development in recent years. This means that transport of input goods and finished products will be absorbed in a good way.

Is there enough housing? Housing for traveling construction workers will be partially solved with temporary housing. For those who will work in the factory, the current rate of housing construction is estimated to be sufficient to cover the needs.

Is the cable thick enough? The capacity of the electricity grid is important for most industries. For a battery factory, it is crucial. When Novo Energy's factory is put into operation in Torslanda, the capacity will be solved with expansion and adaptations in the network.

Is childcare available? If international talent is to be attracted, more places may be required at English preschools and schools. This is also part of the planning for the start-up of the factory.
 

5. How much is the sector expected to grow over time and what effects does it have?

All forecasts indicate that the demand for electric cars, buses, trucks and even work machines will increase. The pace may vary in the forecasts, but when the EU puts pressure on making the Union climate neutral by 2050, it will have an enormous effect. The demand for batteries will escalate. In addition to vehicles and machinery, batteries for energy storage can help to further increase demand.

Exactly what effects the increased demand will have in the long term is difficult to predict. We currently do not know if Novo Energy will expand or if the Volvo Group will build even more battery factories in Sweden. It could mean even more jobs in the long term. Especially if new suppliers choose to establish operations in the region. Good development in battery technology and a strong ecosystem in Gothenburg can attract new employers here.

But here and now, we know that the shift to electrification is a boost for the region, both in terms of employment and increased tax revenue.
 

6. How is the rest of the ecosystem affected?

On the surface, one engine is exchanged for another. A tank is exchanged for a battery. It is not even visible on the outside of the cars. Nevertheless, the effects that come with the technological shift are enormous. No, the internal combustion engine will not die. It will still be important in certain functions and contexts. But sectors linked to the internal combustion engine and fossil fuels will face less demand and will have to adjust. No doubt about it.

At the same time, opportunities are opening for new suppliers in the battery value chain:

• Cathode and anode producers: Companies that manufacture active materials for battery electrodes, lithium, nickel, manganese, and cobalt.
• Electrolyte producers: Companies that specialize in the production of electrolytes, which are critical for ion transport in batteries.
• Separator manufacturer: Companies that produce the thin plastic film that separates the cathode from the anode in a battery.

In addition, machines are needed to manufacture equipment for mounting batteries; technology for integrating cells into modules or packages; robots that streamline production lines. And much more.

The electrification of vehicle fleets also paves the way for the development of autonomous functions and self-driving on a broad front. An electric vehicle is simply easier to integrate with advanced connected technology. The electric operation is less complicated and more distinct, which means better precision and control. By its very nature, electric operation is also easier to integrate with AI, for example to increase energy efficiency or create other benefits.

7. How has electrification and battery production changed Gothenburg in ten years?

Quieter, cleaner, smoother. A prosperous city that leads the development in mobility. A city where young people want to study, where many are employed both in the development and production of the world’s leading batteries. A region where a large number of players in the chain have established themselves in recent years. They cooperate with each other and are tightly integrated with the companies that work with solutions for autonomous vehicles. They all contribute to both technological development and economic development, and not least the profiling of Gothenburg as a world leader in mobility. A city that long depended on and drove the fossil fuel development, but which made the switch.

Maybe a dream scenario. But within reach if you're on board and doing the right things.

Get in touch

Local contacts 

• Joel Görsch
  Investment advisor
  Filds of expertise: Battery value chain, Automotive industry
  +4631-367 61 11 
  joel.gorsch@businessregion.se 
• Anna-Lena Johansson
  Business strategist 
  Fields of expertise: Competence, Strategic competence provision 
  +4631-367 61 52 
  anna-lena.johansson@businessregion.se
• Read more about our Investment services here.