The Swedish automaker has decided to invest around 1.2 billion euros to set up its third European electric vehicle plant near Kosice, Slovakia, the company said on July 1.
The plant, which will be Volvo's first new production site in Europe in nearly 60 years, is planned to be climate neutral, able to produce 250,000 vehicles a year and produce only electric vehicles.
According to Volvo, construction of the plant should start in 2023, equipment and production lines will be installed during 2024, and electric vehicle production will begin in 2026.
According to the automaker, Košice was chosen as the location due to good logistical and transport links with the rest of Europe, access to a good supplier base and attractive incentives offered by the Slovak government.
The Kosice plant will complement Volvo's Ghent plant in Belgium and the Torsland plant in Sweden and help the company go fully electric by 2030 and become environmentally neutral by 2040.
"Expansion in Europe, our largest sales region, is critical to our electrification transition and future growth," said Jim Rowan, CEO of Volvo Cars.
The factories in Thorsland and Ghent have a total capacity of 600,000 vehicles per year.
Volvo aims to sell 1.2 million vehicles worldwide by 2025.
Increased demand for electric vehicles has driven battery metal prices up, with Platts estimates for lithium carbonate and lithium hydroxide up 107.1% and 133.4% respectively YTD to $70,000/t CIF in North Asia and USD 74,000 per ton CIF in North Asia.
