Volvo signs battery supply agreements with CATL and LG Chem

16 May 2019

Volvo Cars has signed long-term agreements with Asian battery manufacturers CATL and LG Chem to supply both itself and subsidiary brand Polestar.

The deal will give the Swedish company a boost as it chases a target of 50% of global sales being a full electric vehicle (EV) by 2025. The agreements cover the supply of battery modules for all models on the company’s existing CMA and upcoming SPA2 modular vehicle platforms, the carmaker said in a statement.

′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. ′The agreements with CATL and LG Chem demonstrate how we will reach our ambitious electrification targets.’

Both companies have experience of working with large vehicle manufacturers, with CATL signing an agreement to supply BMW in July last year. This also included provisions for a battery production facility to be built in Germany, cutting lead times on supplies for EVs. It is unclear whether this plant will supply Volvo.

Volvo’s 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 built at the plant will be a new version of its XC40 small SUV. Currently, the facility manufactures plug-in hybrid variants of the XC40.

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. The upcoming SPA2 architecture is the next generation of Volvo’s in-house developed Scalable Product Architecture (SPA) and will launch early next decade.

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