As a first step for the 50/50 joint venture, Volvo Car Group and Northvolt aim to set up a research and development centre in Sweden that will begin operations in 2022. The centre is intended to build on the battery expertise within both companies and develop next-generation, state-of-the-art battery cells and vehicle integration technologies, specifically developed for use in Volvo and Polestar cars, a press release states.

The planned joint venture will also establish a new gigafactory in Europe with a potential capacity of up to 50 gigawatt hours (GWh) per year. Production is scheduled to start in 2026. As part of the plans, Volvo Car Group also looks to source 15 GWh of battery cells per year from the existing Northvolt Ett battery plant in Skellefteå, Sweden starting in 2024.

“By working with Northvolt we will secure a supply of high-quality, more sustainable battery cells for our pure electric cars,” said Håkan Samuelsson, chief executive at Volvo Car Group. “Working closely with Northvolt will also allow us to strengthen our in-house development capabilities.”

The new gigafactory, planned to be powered by 100 percent clean energy, is expected to employ around 3,000 people. The location of the new plant is yet to be decided.

“Volvo Cars and Polestar are industry leaders in the transition to electrification and perfect partners on the journey ahead as we aim to develop and produce the world’s most sustainable battery cells,” said Peter Carlsson, Co-Founder and CEO of Northvolt. “We are proud to become their exclusive battery cell production partner in Europe.”

The partnership and joint venture are subject to final negotiation and agreements between the parties, including board approval.