Volvo Vehicles and Northvolt mentioned Friday they’d construct a battery manufacturing plant in Gothenburg, Sweden, with building set to start in 2023.

In response to the businesses, the power is about to “have a possible annual cell manufacturing capability of as much as 50 gigawatt hours.” This might equate to supplying sufficient batteries for round 500,000 automobiles yearly, they mentioned.

The batteries produced by the plant will probably be “particularly developed” to allow them to be utilized in fully-electric automobiles from Volvo and Polestar, which is joint owned by Volvo Vehicles and China’s Geely Holding Group.

The so-called gigafactory in Gothenburg will dovetail with a deliberate analysis and improvement middle that was introduced in December 2021 as a part of an funding of roughly 30 billion Swedish krona, or $3.29 billion.

Gigafactories are services that produce batteries for electrical autos on a big scale. Tesla CEO Elon Musk has been extensively credited as coining the time period.

“The battery cell manufacturing three way partnership between Northvolt and Volvo Vehicles will probably be a major participant in European battery cell manufacturing and can symbolize one of many largest cell manufacturing models in Europe,” the businesses mentioned in statements revealed on their web sites on Friday.

“Volvo Vehicles and Northvolt have appointed former Tesla govt Adrian Clarke to steer the manufacturing firm,” they added.

Plans to develop a battery plant have been introduced in December, however a particular location was not confirmed on the time. The R&D middle is because of begin operations this 12 months, with the battery manufacturing facility scheduled to be up and working in 2025.

In March 2021, Volvo Vehicles mentioned it deliberate to develop into a “absolutely electrical automobile firm” by the 12 months 2030. Northvolt is a Stockholm-headquartered firm which was based in 2016. It has attracted funding from Goldman Sachs and Volkswagen, amongst others, and is aiming for 150 GWh of cell output per 12 months by 2030.

Throughout a query and reply session on Friday, Northvolt CEO Peter Carlsson and Javier Varela, Volvo Vehicles’ head of engineering and operations, have been requested if there can be an growth of the three way partnership to components of the world resembling Asia and America.

Varela emphasised it was a step-by-step course of. “At present it is clear that we’re specializing in our European wants and [it’s] to be mentioned sooner or later how we are going to safe capability in different areas,” he mentioned.

For his half, Carlsson mentioned: “Clearly, from day one we now have had a giant European focus and our infrastructure is right here. But it surely’s … additionally fairly clear that the electrification platforms are actually turning into international and the rollout of product portfolios … [is] turning into international.”

“Nevertheless, batteries are heavy to ship they usually’re additionally, to some extent, a bit difficult when it comes to logistics since there … [are] sure hazardous items necessities while you ship batteries.”

This meant that there can be a regionalization of the availability chain, he mentioned. “That is the truth, additionally for us, that we have to proceed exploring.”

Friday’s announcement comes on the finish of per week through which the European Car Producers’ Affiliation mentioned 878,432 new battery electrical passenger automobiles have been registered within the EU final 12 months, in comparison with 538,734 in 2020.

For brand new passenger automobiles, the market share for battery electrical autos stood at 9.1% in 2021. Regardless of registrations for brand spanking new gasoline and diesel autos falling, the ACEA mentioned “typical gasoline sorts nonetheless dominated EU automobile gross sales when it comes to market share in 2021, accounting for 59.6% of all new registrations.”