Volvo signs billion dollar battery supply deals with CATL and LG Chem

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Volvo signs billion dollar battery supply deals with CATL and LG Chem

Volvo Car Group has signed long-term agreements with leading battery makers CATL and LG Chem. This multi-billion dollar supply of lithium-ion batteries for next-generation Volvo and Polestar models.

The agreements cover the global supply of battery modules for all models on the upcoming SPA2 and the existing CMA modular vehicles. This represents a major step towards realizing Volvo’s ambitious electrification strategy.

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CATL of China and LG Chem of South Korea are renowned battery manufacturers. They will fulfill Volvo’s sourcing guidelines in terms of technology leadership, responsible supply chains, and competitive cost models. In China, the battery supply will also benefit from the scale of the wider Geely Group.

Volvo’s electrification commitment:

In 2017 the company committed to electrifying all new cars from 2019. The company also states that it aims for fully electric cars to make up 50 percent of its global sales volume by 2025.

“The future of Volvo 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.”

“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.”

Volvo Cars’ first battery assembly line is currently under construction at its manufacturing plant in Ghent, Belgium. It will be finalized by the end of this year. XC40 will be the first fully electric SUV that will roll out of this unit. Plug-in variants of the XC40 are also already being manufactured here.

New architectures in line

The Compact Modular Architecture currently also underpins the XC40. It is also seen on the fully electric Polestar 2 fastback. These are built by Lynk&Co, Volvo’s sister brand which it also co-owns with Geely. As of this year, all three models are built on a single production line at a Volvo-operated manufacturing plant in Luqiao, China.

Volvo signs billion dollar battery supply deals with CATL and LG Chem
Compact Modular Architecture (CMA)

The upcoming SPA2 architecture is the next generation of Volvo’s in-house developed Scalable Product Architecture (SPA). It will make its way early next decade. SPA is also one of the most advanced vehicle platforms in the car industry. It currently underpins all Volvo models in the 90 and 60 Series. The first Volvo to be launched on SPA2 will be the next generation of the XC90 large SUV.

Volvo signs billion dollar battery supply deals with CATL and LG Chem
SPA2 Architecture

Earlier this year, Volvo also revealed a number of upgraded and newly-developed electrified powertrain options. These will be available across its entire model range going forward. It has also upgraded its existing T8 and T6 Twin Engine plug-in hybrid powertrains, with plug-in options now available on every model it produces.



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Amith Gowda

Amith Gowda

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