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Volvo and Polestar Announce Long-Term Battery Deal

Volvo has announced a new long-term deal with a pair of battery makers. Helping ensure the supply of cells for the next generation of cars from both Volvo and electrified sports car brand Polestar.

The deal is with CATL and LG Chem, two of the world’s leading battery suppliers. It covers the global supply of battery modules for every vehicle on the upcoming SPA2 platform, which will launch with the next XC90, as well as the existing CMA architecture that underpins the XC40 and Polestar 2. The new agreement does not cover the battery modules for the Polestar 1.

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

Volvo says that CATL from China, and South Korea’s LG Chem, have met the automaker’s strict guidelines regarding technology leadership and cost, but also in having responsible supply chains. In China, Volvo says that the battery supply will benefit from the scale of the entire Geely Group.

“With today’s agreement we effectively secured our battery supply for the upcoming decade,” said Martina Buchhauser, senior vice president for procurement at Volvo Cars. “By having two suppliers available in each region we also ensure that we have flexibility in our supply chain going forward.”

Volvo’s first battery assembly line is under construction at a plant in Ghent, Belgium. It’s expected to be ready at the end of the year with the first full EV to be built there the XC40.

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