In 2021, Volvo Vehicles stated it deliberate to change into a “absolutely electrical automobile corporate” through the yr 2030, a transfer which would require it to have a constant and safe provide of batteries for its automobiles.
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The brand new CEO and president of Volvo Vehicles has predicted that shortage of battery provide will change into a urgent factor for his sector, telling CNBC the company has made investments that will assist it acquire a foothold available in the market.
“Just lately, we made a rather really extensive funding with Northvolt, in order that we’re in regulate of our personal battery provide as we move ahead,” Jim Rowan, who joined the industry closing month, advised CNBC’s “Squawk Field Europe” Thursday.
In March 2021, Volvo Vehicles stated it deliberate to change into a “absolutely electrical automobile corporate” through the yr 2030, a transfer which would require it to have a constant and safe provide of batteries for its automobiles.
“I feel battery provide goes to be one of the vital issues that comes into scarce provide within the future years,” Rowan stated.
“And that’s the reason one of the vital causes we made that really extensive funding with Northvolt: In order that we will be able to be in regulate no longer simply of the availability, however we will be able to if truth be told begin to broaden our personal battery chemistry and manufacturing amenities.”
This might allow Volvo Vehicles to be “in entire regulate of {that electrical} propulsion engine for the longer term,” he stated.
Gigafactory plans
In February, Volvo Vehicles and battery maker Northvolt stated they might construct a battery production plant in Gothenburg, Sweden, with building set to start in 2023. In keeping with the firms, the ability is about to “have a possible annual mobile manufacturing capability of as much as 50 gigawatt hours.”
This might equate to supplying sufficient batteries for round 500,000 automobiles once a year, they stated. The corporations’ plans to broaden a gigafactory have been prior to now introduced, despite the fact that a particular location used to be no longer showed on the time.
Because the selection of electrical automobiles on our roads will increase, battery provide will change into an increasingly more essential — and aggressive — cog within the car sector.
Chatting with CNBC’s Annette Weisbach closing yr, Volkswagen CEO Herbert Diess highlighted simply how essential battery manufacturing can be within the years forward, noting that demanding situations did exist.
“Batteries could be, shall we embrace, a continual constraint for the expansion of EVs over the following 5 to ten years,” he stated.
“For the reason that lead instances are massive. We want such a lot power and mobile manufacturing … [There is a] massive provide chain which needs to be arrange throughout the subsequent years, and that may, that would possibly, lead to a few constraints.”
Extra lately, this month noticed Elon Musk spotlight the significance of lithium, a key a part of the batteries utilized in electrical automobiles. On April 8, the Tesla CEO tweeted that lithium’s value had “long gone to insane ranges!”
“Tesla would possibly if truth be told must get into the mining & refining without delay at scale, until prices make stronger,” Musk stated. “There is not any scarcity of the component itself, as lithium is sort of in all places on Earth, however tempo of extraction/refinement is sluggish.”
Volvo’s electrification plans put it in direct festival with usual automakers like Volkswagen, GM and Ford, in addition to Tesla. Simply this week, Ford CEO Jim Farley stated his industry deliberate to “problem Tesla and all comers to change into the highest EV maker on this planet.”
All over his interview with CNBC, Volvo Vehicles’ Rowan used to be requested if there used to be a hope Musk’s takeover of Twitter would end up to be a distraction for the Tesla CEO.
“I do not know,” he responded. “I do know something … I will be able to no longer be getting distracted from what we want to get carried out. And that’s, somewhat merely, that we want to proceed our march against electrification.”
Rowan used to be talking at the identical day his industry introduced effects for the primary quarter of 2022.
Earnings grew through 8% to succeed in 74.3 billion Swedish krona (round $7.56 billion). Income ahead of passion and taxes got here in at 6 billion krona, in comparison to 8.4 billion within the first quarter of 2021.
The corporate offered 148,295 automobiles within the first quarter, which it stated used to be a 20% drop in comparison to the similar duration closing yr.
As with many companies, provide chain problems proceed to impact operations. “Semiconductor constraints persisted to step by step make stronger,” the corporate stated.
“Then again, because of a short lived scarcity of a particular semiconductor, manufacturing used to be down on the finish of the primary quarter. This scarcity is anticipated to stay in the second one quarter.”
Having a look forward, the industry stated it used to be anticipating “provide chains to make stronger in the second one part of the yr.”
—Chloe Taylor contributed to this newsletter.
