Volvo Inks Huge Battery Deal, Secures Supply For Next Decade

After performance sub-brand Polestar, Volvo has also signed a battery supply deal with Chinese battery manufacturer CATL and Korea’s LG Chem to supply the Swedish automakers future range of electric vehicles.

Volvo says that the multi-billion-dollar supply deal will see CATL and LG Chem provide all battery modules for vehicles based on the upcoming SPA2 architecture and the current CMA modular vehicle platform.

“The future of Volvo Cars is electric and we are firmly committed to moving beyond the internal combustion engine,” president and chief executive of Volvo Cars Håkan Samuelsson said. “Today’s agreements with CATL and LG Chem demonstrate how we will reach our ambitious electrification targets.”

Also Read: Polestar Picks CATL and LG Chem As Official Battery Suppliers For Its EVs

The Swedish car manufacturer is aiming for fully electric vehicles to make up 50 per cent of its global sales volume by 2025.

“With today’s agreement we effectively secured our battery supply for the upcoming decade,” senior vice president for procurement at Volvo Cars Martina Buchhauser said. “By having two suppliers available in each region we also ensure that we have flexibility in our supply chain going forward.”

Volvo’s current SPA platform underpins all existing 90 and 60 Series models, while the SPA2 architecture will be launched early next decade and premiere in the next-generation XC90. As for the Compact Modular Architecture (CMA), it is currently used by the Volvo XC40, Polestar 2, and all Lynk & Co models.

Construction of Volvo Cars’ first battery assembly line is currently underway in Ghent, Belgium. This site will be completed by the end of the year and it will commence production of the all-electric XC40 shortly after.