How Volvo Plans to Fight Tesla in the EV Game
Unlike Tesla’s make-them-yourself model, Volvo locks in battery supply for decades to come
Volvo wants to make sure the Volvo and Polestar brands are major players in the electric vehicle space and took some major steps today to make sure that plan never runs out of juice.
0:00 / 0:00
The Swedish brand owned by Chinese company Geely announced today it has signed long-term agreements with two major lithium-ion battery makers: CATL of China and LG Chem of South Korea. Unlike Tesla which makes its own batteries at the Gigafactory, Volvo has cemented a steady supply for the next decade as the automotive world races toward electrification.
Volvo has ambitious plans. It raised eyebrows when it announced in 2017 that all new Volvo models launched from 2019 on would have some degree of electrification, mostly hybrids initially. Leadership upped the ante when it announced the goal of fully electric cars making up half its global sales by 2025. Polestar was created as an electric brand. It started with a hybrid but all subsequent models will be electric only.
"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. "Today's agreements with CATL and LG Chem demonstrate how we will reach our ambitious electrification targets."
All Volvos ride on one of two platforms: the Compact Modular Architecture (CMA) for the smaller 40 series and the Scalable Product Architecture (SPA) for everything else. The new battery deal will cover the current CMA platform including the first electric Volvo, the XC40, which currently has a plug-in hybrid option. The electric XC40 will be built in Ghent, Belgium, where Volvo is building its first battery assembly line. Construction will be done by the end of the year. Also on CMA is the electric Polestar 2 and some models sold by Lynk & Co, also owned by Geely, all of which will be built at a plant in Luqiao, China.
The next generation SPA2 will use the new battery source. That means next-gen 90 and 60 Series vehicles. First up will be the next XC90. Volvo will add XC90 production to its new plant near Charleston, South Carolina, in 2021. The plant currently makes the S60, including plug-in hybrids, and a pure EV is expected in the future from Volvo's only North American plant.
Currently, the U.S. only gets the T8 plug-in hybrid, but in the future we will also receive the T6 Twin Engine that is offered in other markets as part of a mandate to offer a plug-in on every model Volvo produces.
Alisa Priddle joined MotorTrend in 2016 as the Detroit Editor. A Canadian, she received her Bachelor of Journalism degree from Carleton University in Ottawa, Ontario, and has been a reporter for 40 years, most of it covering the auto industry because there is no more fascinating arena to cover. It has it all: the vehicles, the people, the plants, the competition, the drama. Alisa has had a wonderfully varied work history as a reporter for four daily newspapers including the Detroit Free Press where she was auto editor, and the Detroit News where she covered the GM and Chrysler bankruptcies, as well as auto trade publication Wards, and two enthusiast magazines: Car & Driver and now MotorTrend. At MotorTrend Alisa is a judge for the MotorTrend Car, Truck, SUV and Person of the Year. She loves seeing a new model for the first time, driving it for the first time, and grilling executives for the stories behind them. In her spare time, she loves to swim, boat, sauna, and then jump into a cold lake or pile of snow.
Read More
