Volvo Car Signs Multi-Billion-Dollar Deal
Volvo Car Group signs a multi-billion-dollar battery supply deal with CATL and LG Chem.
In 2017, Volvo Car Group announced that all cars launched from 2019 onwards would be electrified and that they would aim for fully electric cars to make up 50% of its global sales volume by 2025.
Recently, the company successfully allied with leading battery makers CATL and LG Chem. This long-term agreement will ensure the multi-billion-dollar, global supply of lithium-ion batteries over the coming decade for next-generation Volvo and Polestar models, including the upcoming Scalable Product Architecture (SPA2) and the existing Compact Modular Architecture (CMA) vehicle platforms.
“The future of Volvo Cars is electric, and we are firmly committed to moving beyond the internal combustion engine,” said Håkan 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 been supplying lithium-ion batteries to the global automotive industry for a long time. They also adhere to 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.”
Additionally, Volvo Cars’ first battery assembly line is still under construction at its manufacturing plant in Ghent, Belgium, and will be completed by the end of this year. Once completed, the first vehicle that will be produced at the new plant will be the full-electric and award-winning XC40 small SUV. Plug-in hybrid versions of this car are already manufactured there.
The XC40 and the Polestar 2 fastback, and other models sold by Lynk & CO (Volvo’s sister brand which is co-owned with Geely) are currently reinforced with CMA. As of this year, all three models will be produced at the Volvo-operated manufacturing plant in Lugiao, China. Meanwhile, the first Volvo to be launched on SPA2–set to launch early next decade–will be the XC90 large SUV.
Earlier this year, Volvo Cars introduced newly developed electrified powertrain options to be made available across its entire model range going forward, with plug-in options now available on every plug-in hybrid powertrain models it produces.