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Volvo inks multi-billion dollar battery deals with LG Chem and CATL for EVs

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Volvo Car Group has inked a enormous multi-billion dollar supply handle the Chinese battery manufacturer, CATL, and Korea’s LG Chem to provide its planned fleet of electric vehicles.

The lithium ion batteries from both providers will power the development of Volvo Cars’ electrification strategy for its own brand and the company’s Polestar joint venture with Chinese automobile manufacturer Geely.

Deals with the two companies cover the international supply of battery modules for many models on the SPA2 and CMA modular vehicle platforms, Volvo said in a statement.

Back in 2017, Volvo . Committed that all its new vehicles started after 2019 would be electrified in making that commitment a reality, and this marks a big step, the company said.

Volvo expects 50 percent of its sales volume to be comprised of electric vehicles.

“The future of Volvo Cars is electric and we are committed to moving beyond the internal combustion engine,” said Håkan Samuelsson, president and CEO of Volvo Cars, in a statement. “Today’s arrangements with CATL and LG Chem demonstrate how we’ll reach our ambitious electrification targets. ”

Volvo’s got one battery assembly line under construction at its manufacturing plant in Ghent, where it expects its first XC40 small SUV to be rolling off the assembly line by the end of the year.

Earlier this year, Volvo revealed new electrified powertrain alternatives for its entire model range. The company updated its T8 and. T6 Twin Engine plug-in hybrid powertrains and now has plug-in alternatives.

Just three months ago Volvo unveiled its first all-electric vehicle design for Polestar, its joint venture with Geely. And the Polestar 2 are the first vehicle to reap the fruits of the battery supply agreement with LG and CATL.

Polestar unveils its all-electric answer to the Tesla Model 3

The prices between Polestar and the battery makers cover the supply of lithium ion battery modules for the portfolio of Polestar vehicles over the next ten decades, starting with its first fully electric car, the Polestar 2, in 2020.

“With these providers in place we have the secure knowledge that our performance cars will be powered by high-quality batteries that our customers can rely on,” comments Thomas Ingenlath, Chief Executive Officer of Polestar.

This battery supply arrangement comes as roadblocks have emerged to Polestar’s plans to market its new electric car in the U.S. as a direct competitor to Tesla’s Model 3.

Ingenlath told the Los Angeles Times that when the U.S. trade war with China lengthens, the business may have to scrap plans to market in the U.S.

“We would embrace free trade as in the interests of the customer,” Ingenlath told the LA Times in an interview. He explained that the company wouldn’t export cars to countries where tariffs would make selling the vehicle impossible because it couldn’t be priced competitively.

Polestar would seem to expand or contract its sales presence in the U.S. based on where tariffs property, ” the executive said. At current levels tariffs on cars manufactured in China are set at 25%.

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