Volvo AB plans to build a “large-scale” battery factory in Sweden to meet the expected growth in demand for electric trucks and buses.
The Swedish manufacturer, which currently receives the elements from Samsung SDI Co., said on Wednesday that it had begun the process of obtaining permits to establish its own production in the municipality of Mariestad. It is not reported how much the plant will cost.
The world’s second largest truck manufacturer plans to gradually increase capacity and enter large-scale production by 2030. Volvo has confirmed its goal: by the same year, at least 35% of its products should be electric.
“This build—up will require large volumes of high-performance batteries,” said CEO Martin Lundstedt. The production of cells within the company is the “logical next step.”
Volvo’s announcement underscores its drive to become a leader in electric trucks and the batteries they need, while the heavy battery market is still in its infancy. Last year, 346 cars were registered in Europe.
Volvo gained 0.3% as of 11:22 a.m. in Stockholm. The stock has lost 11% this year.
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The company hedges its bets by developing cars powered by batteries, fuel cells and internal combustion engines powered by biofuels, synthetic fuels and even hydrogen. Volvo, Traton SE and Daimler Truck Holding AG plan to spend 500 million euros ($509 million) to install at least 1,700 charging points in Europe for heavy trucks and buses.
Volvo said its batteries will be developed specifically for commercial vehicles such as trucks, buses and construction equipment. The plant will need “thousands” of employees, the representative said, declining to disclose details.