Volvo Seeks $1.2 Billion from Swedish Government for EV Battery Plant
Volvo’s Battery Plant in Gothenburg
- The Swedish carmaker has a battery plant scheduled to open in 2025 in Gothenburg.
- In addition to asking for $1.2 billion worth of taxpayer dollars, Volvo has applied for state loan guarantees.
- Volvo recently backed away from a plan to sell nothing but EVs by 2030.
Volvo is seeking the equivalent of $1.2 billion from the Swedish government to help fund the electric vehicle battery plant it’s constructing alongside Northvolt, through a joint venture known as Novo Energy. The plant, located in Gothenburg, has been years in the making and is scheduled to open in 2025. It will have a potential annual cell production capacity of up to 50 GWh, enough to supply the needs of around 500,000 vehicles per year, including Volvo and Polestar models.
According to Dagens Nyheter, the joint venture is asking for the largest direct grant that’s been sought from the Swedish Energy Agency – totaling 13 billion Swedish kronor (~$1.2 billion) – to complete the plant. Volvo and Northvolt have also applied for state loan guarantees through the local Debt Office. However, the factory currently lacks 70% of the electricity it needs to operate.
Volvo had previously announced plans to sell only EVs by 2030 but recently revised its strategy. The company now aims for electrified vehicles to account for 90-100% of its sales by 2030, including plug-in hybrids and mild-hybrids. The decision was influenced by the slower-than-expected rollout of charging infrastructure, a lack of government incentives, and uncertainties created by new EV tariffs.
In a statement, Volvo CEO Jim Rowan expressed the company’s commitment to electric vehicles, stating that they provide a superior driving experience and improve the overall customer experience. He acknowledged that the transition to electrification will not be linear, as customers and markets are moving at different speeds of adoption.
