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Northvolt and Volvo Cars choose Gothenburg for their new battery factory

Automaker Volvo Cars and battery maker Northvolt will build their joint battery factory in Gothenburg, western Sweden, the two companies announced on Friday. The new 50 GWh plant will create up to 3,000 jobs and manufacture battery cells specially developed for use in Volvo and Polestar pure-electric cars, the Sweden-based companies said. Operations will begin in 2025. The two companies announced last year that they would form a joint venture to develop batteries, including setting up a gigafactory for production and a research and development center, a total investment of about $3.3 billion.

Northvolt and Volvo said former Tesla executive Adrian Clarke has been named to lead the production company.

“He has a long experience of Tesla and how to build these kinds of factories,” Northvolt CEO Peter Carlsson, who also worked for Tesla, told Reuters.

Volvo Cars head of engineering and operations Javier Varela says access to non-fossil energy, skills and infrastructure was a key factor in choosing Volvo’s hometown of Gothenburg. .

Competition for talent is fierce, with most battery engineers based in Asia. Tesla and Asian companies such as LG and Samsung SDI are also setting up factories in Europe.

Northvolt’s gigafactory in the Swedish town of Skelleftea assembled its first battery cell in late December, making it the first European company to design and manufacture a battery in Europe.

Carlsson said it was working as expected, although he said global supply chain issues, semiconductor shortages and COVID-19 made it more of a challenge. “It hasn’t been the easiest of times,” he said.

Volvo Cars, majority-owned by China’s Geely Holding, aims to sell 50% pure electric cars by the middle of this decade and fully electric-only cars by 2030.

Northvolt, whose main shareholder is Volkswagen, has so far received more than $30 billion in contracts from customers including BMW, Fluence, Scania, Volkswagen, Volvo Cars and Polestar.

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