In 2021, Volvo Automobiles stated it deliberate to turn into a “absolutely electrical automotive firm” by the yr 2030, a transfer which would require it to have a constant and safe provide of batteries for its autos.
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The brand new CEO and president of Volvo Cars has predicted that shortage of battery provide will turn into a urgent concern for his sector, telling CNBC the agency has made investments that may assist it acquire a foothold out there.
“Not too long ago, we made a fairly substantial funding with Northvolt, in order that we’re answerable for our personal battery provide as we go ahead,” Jim Rowan, who joined the enterprise final month, advised CNBC’s “Squawk Field Europe” Thursday.
In March 2021, Volvo Automobiles stated it deliberate to turn into a “fully electric car company” by the year 2030, a transfer which would require it to have a constant and safe provide of batteries for its autos.
“I believe battery provide goes to be one of many issues that comes into scarce provide within the years to come back,” Rowan stated.
“And that is one of many causes we made that substantial funding with Northvolt: In order that we might be in management not simply of the provision, however we will really begin to develop our personal battery chemistry and manufacturing amenities.”
This might allow Volvo Automobiles to be “in full management of {that electrical} propulsion engine for the long run,” he stated.
Gigafactory plans
In February, Volvo Automobiles and battery maker Northvolt stated they might build a battery manufacturing plant in Gothenburg, Sweden, with development set to start in 2023. In accordance with the businesses, the power is ready to “have a possible annual cell manufacturing capability of as much as 50 gigawatt hours.”
This might equate to supplying sufficient batteries for round 500,000 vehicles yearly, they stated. The corporations’ plans to develop a gigafactory had been beforehand introduced, though a selected location was not confirmed on the time.
Because the variety of electrical autos on our roads will increase, battery provide will turn into an more and more vital — and aggressive — cog within the automotive sector.
Speaking to CNBC’s Annette Weisbach final yr, Volkswagen CEO Herbert Diess highlighted simply how vital battery manufacturing can be within the years forward, noting that challenges did exist.
“Batteries may be, for example, a steady constraint for the expansion of EVs over the subsequent 5 to 10 years,” he stated.
“As a result of the lead occasions are large. We want a lot vitality and cell manufacturing … [There is a] large provide chain which must be arrange throughout the subsequent years, and that may, which may, result in some constraints.”
Extra just lately, this month noticed Elon Musk spotlight the significance of lithium, a key a part of the batteries utilized in electrical autos. On April 8, the Tesla CEO tweeted that lithium’s price had “gone to insane levels!”
“Tesla would possibly really must get into the mining & refining immediately at scale, except prices enhance,” Musk stated. “There isn’t a scarcity of the aspect itself, as lithium is sort of in all places on Earth, however tempo of extraction/refinement is gradual.”
Volvo’s electrification plans put it in direct competitors with long-established automakers like Volkswagen, GM and Ford, in addition to Tesla. Simply this week, Ford CEO Jim Farley stated his enterprise deliberate to “challenge Tesla and all comers to become the top EV maker in the world.”
Throughout his interview with CNBC, Volvo Automobiles’ Rowan was requested if there was a hope Musk’s takeover of Twitter would show to be a distraction for the Tesla CEO.
“I don’t know,” he replied. “I do know one factor … I can’t be getting distracted from what we have to get performed. And that’s, fairly merely, that we have to proceed our march in direction of electrification.”
Rowan was talking on the identical day his enterprise introduced outcomes for the primary quarter of 2022.
Income grew by 8% to succeed in 74.3 billion Swedish krona (round $7.56 billion). Earnings earlier than curiosity and taxes got here in at 6 billion krona, in comparison with 8.4 billion within the first quarter of 2021.
The corporate offered 148,295 vehicles within the first quarter, which it stated was a 20% drop in comparison with the identical interval final yr.
As with many companies, provide chain points proceed to impact operations. “Semiconductor constraints continued to regularly enhance,” the corporate stated.
“Nevertheless, resulting from a short lived scarcity of a selected semiconductor, manufacturing was down on the finish of the primary quarter. This scarcity is predicted to stay within the second quarter.”
Wanting forward, the enterprise stated it was anticipating “provide chains to enhance within the second half of the yr.”
—Chloe Taylor contributed to this text.
