Volvo inks multi-billion dollar battery deals with LG Chem and CATL for EVs
The lithium ion batteries from both suppliers will power the development of Volvo Cars’ electrification strategy for its own brand and the company’s Polestar joint venture with Chinese auto manufacturer Geely.
Deals with the two companies cover the global supply of battery modules for all models on the upcoming SPA2 and CMA modular vehicle platforms, Volvo said in a statement.
Back in 2017, Volvo . committed that all of its new vehicles launched after 2019 would be electrified and this marks a big step in making that commitment a reality, the company said.
Volvo expects 50 percent of its global sales volume from 2025 to be comprised of electric vehicles.
“The future of Volvo Cars is electric and we are firmly committed to moving beyond the internal combustion engine,” said Håkan Samuelsson, president and CEO of Volvo Cars, in a statement. “Today’s agreements with CATL and LG Chem demonstrate how we will reach our ambitious electrification targets.”
Volvo’s got one battery assembly line currently under construction at its manufacturing plant in Ghent, where it expects its first fully-electric XC40 small SUV to be rolling off the assembly line by the end of the year.
Earlier this year, Volvo revealed new electrified powertrain options for its entire model range. The company upgraded its T8 and . T6 Twin Engine plug-in hybrid powertrains and now has plug-in options for every model the company makes.
Just three months ago Volvo unveiled its first all-electric vehicle design for Polestar, its joint venture with Geely. And the Polestar 2 will be the first vehicle to reap the fruits of the battery supply agreement with LG and CATL.
The deals between Polestar and the battery makers cover the supply of lithium ion battery modules for the entire portfolio of Polestar vehicles over the next ten years, starting with its first fully electric car, the Polestar 2, in early 2020.
“With these suppliers in place we have the secure knowledge that our electric performance cars will be powered by high-quality batteries that our customers can rely on,” comments Thomas Ingenlath, Chief Executive Officer of Polestar.
This battery supply agreement comes as roadblocks have emerged to Polestar’s plans to sell its new electric vehicle in the U.S. as a direct competitor to Tesla’s Model 3.
Ingenlath told the Los Angeles Times that if the U.S. trade war with China lengthens, the company may have to scrap plans to sell in the U.S.
“We would embrace free trade as in the interests of the consumer,” Ingenlath told the LA Times in an interview. He said that the company wouldn’t export cars to countries where tariffs would make selling the vehicle impossible because it couldn’t be priced competitively.
Polestar would look to expand or contract its sales presence in the U.S. based on where tariffs land, the executive said. At current levels tariffs on cars manufactured in China are set at 25%.