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Volvo inks battery supply deals with CATL and LG Chem
Volvo Car Group says that it has signed long-term agreements with battery makers CATL and LG Chem to ensure the multi-billion dollar supply of lithium ion batteries over the coming decade.
The agreements cover the global supply of battery modules for all models on the upcoming SPA2 and the existing CMA modular vehicle platforms.
In 2017 Volvo Cars made a commitment that all new Volvo cars launched from 2019 would be electrified. The company has since reinforced this strategy, by stating that it aims for fully electric cars to make up 50% 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,” says Håkan Samuelsson, president and CEO of Volvo Cars, in a press release. “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 well known battery manufacturers within the industry, both of which have successful track records of supplying lithium ion batteries to the automotive industry. In China, battery supply will benefit from the scale of the wider Geely Group.
“With today’s agreement we effectively secured our battery supply for the upcoming decade,” adds 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 finalised by the end of this year and the first fully electric Volvo to be built in Ghent is the XC40 small SUV. Already now, plug-in hybrid variants of the XC40 are manufactured there.
The Compact Modular Architecture (CMA) currently underpins the XC40, as well as the fully electric Polestar 2 fastback and several models sold by LYNK & CO, Volvo’s sister brand which it co-owns with Geely. As of this year, all three models will be built on a single production line at a Volvo-operated manufacturing plant in Luqiao, China.
The upcoming SPA2 architecture is the next generation of Volvo’s in-house developed Scalable Product Architecture (SPA) and will be launched early next decade. The first Volvo to be launched on SPA2 will be the next generation of the XC90 large SUV.
