Two luxury brand car companies intend to produce their own power batteries to reduce supply chain risk

Volvo Automotive Group announced on June 21st that it plans to set up a joint venture with Swedish battery maker Northvolt to develop and produce more sustainable batteries in order to supply the next generation of all-electric Volvo and Polar Star cars.

Swedish battery maker Northvolt was founded in 2016 by Tesla, a former vice chairman of supply chain management. Volkswagen Group invested 900 million euros in battery research and development in Northvolt in June 2019, and received $1 billion in equity financing in 2020 to expand Northvolt Ett into Europe's first lithium-ion battery super factory. It was once regarded as a strong competitor for Europe to compete with battery giants such as Ningde era and LG Chemistry in the future.

In the partnership, Volvo said it would first set up an R & D center in Sweden to develop the next generation of state-of-the-art battery and automotive integration technology, which will be operational in 2022. In addition, a super factory will be built in Europe with a potential annual production capacity of 50GWhh, which is expected to start production in 2026.

It is reported that Northvolt will become Volvo's only battery production partner in Europe, and this cooperation will greatly promote Volvo's ambitious electrification plan.

According to data, on March 2, Volvo issued a specific timetable for the full transformation of electrification, saying that it would be fully electrified by 2025, when the proportion of pure electric models would reach 50%. The rest are hybrid models; become a pure electric luxury car company in 2030; strive to become a climate zero-load benchmark enterprise in 2040, and all pure electric models will be sold online only.

In addition, recently, German luxury car company Daimler also said it plans to produce its own batteries.

It is understood that as early as 2019, Daimler reached an agreement with Funeng Technology to supply lithium-ion batteries. The key elements of the cooperation agreement include the research and development and commercialization of advanced high-energy-density batteries, and achieving the goal of cost competitiveness. According to the plan, Funeng Technology will build a production plant in eastern Germany to help Daimler increase its production of electric vehicles. In July 2020, Daimler announced that Mercedes-Benz had reached a strategic partnership with Funeng Technology, spending about 900 million yuan to acquire a 3% stake in Funeng.

In addition, there are reports that Daimler has plans to produce its own cells, although it is not clear whether Daimler produces its own cells or co-produces them with partners. A spokesman for Daimler declined to comment.

It is worth noting that just last month, Daimler strengthened its cooperation with Ningde era, which states that Ningde era will provide lithium-ion battery modules for Daimler series electric trucks from 2021, and that Ningde era will supply lithium-ion battery packs for the 2024 mass-produced Mercedes-Benz Actros LongHaul electric trucks with a range of up to 500km and a supply period of more than 2030 years.