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Volvo Car Group signs multi-billion Li-ion 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 to ensure the multi-billion dollar supply of lithium-ion batteries over the coming decade 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 vehicle platforms and represent a major step towards realizing Volvo Cars’ ambitious electrification strategy.

In 2017 Volvo Cars committed that all new Volvo cars launched from 2019 would be electrified. The company has since reinforced this strategy, by stating that it aims for fully electric cars to make up 50% of its global sales volume by 2025.

The future of Volvo Cars is electric and we are firmly committed to moving beyond the internal combustion engine. Today’s agreements with CATL and LG Chem demonstrate how we will reach our ambitious electrification targets.

—Håkan Samuelsson, president and CEO of Volvo Cars

CATL of China and LG Chem of South Korea have long and successful track records supplying lithium-ion batteries to the global automotive industry. They fulfil Volvo Cars’ strict sourcing guidelines in terms of technology leadership, responsible supply chains and competitive cost models. In China, battery supply will benefit from the scale of the wider Geely Group.

With today’s agreement we effectively secured our battery supply for the upcoming decade. By having two suppliers available in each region we also ensure that we have flexibility in our supply chain going forward.

—Martina Buchhauser, senior vice president for procurement at Volvo Cars

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 and the first fully electric Volvo to be built in Ghent is the award-winning XC40 small SUV. Plug-in hybrid variants of the XC40 are already manufactured there.

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. As of this year, all three models will be built on a single production line at a Volvo-operated manufacturing plant in Luqiao, China.

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

Earlier this year, Volvo Cars revealed a number of upgraded and newly-developed electrified powertrain options, to 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.



One of the main issues with electrification is securing a large supply of batteries. In many ways, this explains why Tesla is the only volume electric car maker: they worked on their battery supply before it became a bottleneck.

It's good to see Volvo and others working on getting enough batteries. They still have a long way to catch-up, but at least they are on their way.


CATL and LG are already mass producing EV batteries equivalent to Panasonic-TESLA. More competition will probably accelerate development and lower price.

The first producers to break the $100/kWh and 500+ Wh/Kg at the battery pack level may corner the market?


We need batteries made from not only Li; but also, Al and Na; and Si, S, C, in graphene form, etc.; batteries are the key to the clean energy transition and batteries from the more common minerals are the key to affordable batteries.


Yes Lad, I fully agree that higher performance, lower cost post-Li batteries are required to transition to a cleaner energy era making use of more 24/7 REs. .

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