Volvo Car Group signs multibillion-dollar battery supply deals
Volvo Car Group has signed long-term agreements with leading battery makers CATL and LG Chem to ensure the multibillion-dollar supply of lithium ion batteries over the coming decade for next generation Volvo and Polestar models.
The agreements cover the global supply of battery modules for all models on the upcoming SPA2 and the existing CMA modular vehicle platforms and represent a major step towards realising Volvo Cars’ ambitious electrification strategy.
In 2017, Volvo Cars made the industry-leading commitment that all new Volvo cars launched from 2019 would be electrified. The company has since reinforced this strategy, by stating it aims for fully electric cars to make up 50 percent of its global sales volume by 2025.
“The future of Volvo Cars is electric and we are firmly committed to moving beyond the internal combustion engine,” said Hakan Samuelsson, president and CEO of Volvo Cars. “Today’s agreements with CATL and LG Chem demonstrate how we will reach our ambitious electrification targets.”
CATL of China and LG Chem of South Korea are renowned battery manufacturers that have long and successful track records supplying lithium ion batteries to the global automotive industry. They fulfill Volvo Cars’ strict sourcing guidelines in terms of technology leadership, responsible supply chains and competitive cost models.
“With today’s agreement we effectively secured our battery supply for the upcoming decade,” said Martina Buchhauser, senior vice president for procurement at Volvo Cars. “By having two suppliers available in each region we also ensure that we have flexibility in our supply chain going forward.”
Volvo Cars’ first battery-assembly line is currently under construction at its manufacturing plant in Ghent, Belgium. It will be finalized by the end of this year and the first fully electric Volvo to be built in Ghent is the award-winning XC40 small SUV. Already now, plug-in hybrid variants of the XC40 are manufactured there.