In 2021, Volvo Cars stated it deliberate to grow to be a “absolutely electrical automotive firm” by the 12 months 2030, a transfer which would require it to have a constant and safe provide of batteries for its autos.
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The new CEO and president of Volvo Cars has predicted that shortage of battery provide will grow to be a urgent subject for his sector, telling CNBC the agency has made investments that will assist it achieve a foothold available in the market.
“Recently, we made a fairly substantial funding with Northvolt, in order that we’re accountable for our personal battery provide as we go ahead,” Jim Rowan, who joined the enterprise final month, advised CNBC’s “Squawk Box Europe” Thursday.
In March 2021, Volvo Cars stated it deliberate to grow to be a “absolutely electrical automotive firm” by the 12 months 2030, a transfer which would require it to have a constant and safe provide of batteries for its autos.
“I feel battery provide goes to be one of many issues that comes into scarce provide within the years to come back,” Rowan stated.
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“And that is one of many causes we made that substantial funding with Northvolt: So that we might be in management not simply of the availability, however we will really begin to develop our personal battery chemistry and manufacturing services.”
This would allow Volvo Cars to be “in full management of {that electrical} propulsion engine for the long run,” he stated.
Gigafactory plans
In February, Volvo Cars and battery maker Northvolt stated they might construct a battery manufacturing plant in Gothenburg, Sweden, with building set to start in 2023. According to the businesses, the power is about to “have a possible annual cell manufacturing capability of as much as 50 gigawatt hours.”
This would equate to supplying sufficient batteries for round 500,000 automobiles yearly, they stated. The companies’ plans to develop a gigafactory had been beforehand introduced, though a selected location was not confirmed on the time.
As the variety of electrical autos on our roads will increase, battery provide will grow to be an more and more essential — and aggressive — cog within the automotive sector.
Speaking to CNBC’s Annette Weisbach final 12 months, Volkswagen CEO Herbert Diess highlighted simply how essential battery manufacturing could be within the years forward, noting that challenges did exist.
“Batteries is perhaps, as an example, a steady constraint for the expansion of EVs over the subsequent 5 to 10 years,” he stated.
“Because the lead instances are enormous. We want a lot vitality and cell manufacturing … [There is a] enormous provide chain which needs to be arrange throughout the subsequent years, and that can, that may, result in some constraints.”
More just lately, this month noticed Elon Musk spotlight the significance of lithium, a key a part of the batteries utilized in electrical autos. On April 8, the Tesla CEO tweeted that lithium’s value had “gone to insane ranges!”
“Tesla may really need to get into the mining & refining immediately at scale, except prices enhance,” Musk stated. “There is not any scarcity of the aspect itself, as lithium is sort of all over the place on Earth, however tempo of extraction/refinement is gradual.”
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Volvo’s electrification plans put it in direct competitors with long-established automakers like Volkswagen, GM and Ford, in addition to Tesla. Just this week, Ford CEO Jim Farley stated his enterprise deliberate to “problem Tesla and all comers to grow to be the highest EV maker on the earth.”
During his interview with CNBC, Volvo Cars’ Rowan was requested if there was a hope Musk’s takeover of Twitter would show to be a distraction for the Tesla CEO.
“I don’t know,” he replied. “I do know one factor … I cannot be getting distracted from what we have to get carried out. And that’s, fairly merely, that we have to proceed our march in direction of electrification.”
Rowan was talking on the identical day his enterprise introduced outcomes for the primary quarter of 2022.
Revenue grew by 8% to achieve 74.3 billion Swedish krona (round $7.56 billion). Earnings earlier than curiosity and taxes got here in at 6 billion krona, in comparison with 8.4 billion within the first quarter of 2021.
The firm bought 148,295 automobiles within the first quarter, which it stated was a 20% drop in comparison with the identical interval final 12 months.
As with many companies, provide chain points proceed to affect operations. “Semiconductor constraints continued to progressively enhance,” the corporate stated.
“However, on account of a brief scarcity of a selected semiconductor, manufacturing was down on the finish of the primary quarter. This scarcity is predicted to stay within the second quarter.”
Looking forward, the enterprise stated it was anticipating “provide chains to enhance within the second half of the 12 months.”
—Chloe Taylor contributed to this text.