Build Electric Car Plant
Volvo has asked the Swedish government for $1.2 billion. It wants to build an electric car plant in Sweden.
Now, let me just ask the question, it’s a rhetorical one, who owns Volvo? Volvo makes some good EVs.
These cars have been so incredibly reliable. Very reliable, really nice cars to drive. Volvo, of course, now is much more into EVs.
Volvo’s Transition to Electric Vehicles
Now, Volvo, a huge percentage of their car sales are EVs. However, Ford also sold Volvo.
They sold Volvo to Geely. Geely are a Chinese conglomerate. Well, that means essentially a Chinese company wants to build a battery factory, and probably will in Sweden, using $1.2 billion of Swedish public funds.
Joint Venture with Northvolt
Volvo is seeking the equivalent of $1.2 billion from the Swedish government to help fund the electric vehicle battery plant it’s constructing alongside Northvolt, which is a joint venture known as Novo Energy.
The plant, located in Gothenburg, has been years in the making and is scheduled to open in 2025.
It will have a potential annual cell production capacity of up to 50 gigawatt-hours, enough to supply 500,000 vehicles per year, including Volvo and Polestar models.
Geely’s Advanced Battery Technology
Now, keep in mind, Geely, they already manufacture their own batteries.
So now, There are quite a few different Geely cars, Zecca vehicles, for example, the new Geely EVs themselves, that will have within, in fact, already do, but will have even more models with their new battery pack, which is called the Short Blade battery.
It’s a lithium-ion phosphate battery, very similar to be with its Blade battery, but it’s shorter than the blade battery, so it charges much faster.
In fact, when I say charges much faster, it’s actually the fastest charging battery in the world for an EV.
It charges at a max potential speed of 600 kilowatt. It was originally 560 kilowatt, but apparently, they’ve just discovered a new way to increase it to 600 kilowatt.
these batteries charging at close to 560 kilowatt. these batteries are amazing, not to mention very high energy density.
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The energy density is about 192 watts-hours per kilogram. That makes them one of the highest energy density LFP batteries in the world.
In addition to that, they’re extremely safe They have incredible thermal runaway protection, which means it’s almost impossible to set them on fire.
They’ve passed the NALP penetration test. They’ve passed all kinds of these crazy tests that they’ve put them through. Incredibly impressive batteries.
Challenges with the Gothenburg Plant
Now, as far as I know, the Northvolt joint venture doesn’t plan on manufacturing those batteries, which I think it would be a pretty big mistake.
I don’t understand why. Maybe some cost, they already planned on the batteries that they wanted to make. Now, I think they should pivot and make those batteries.
It’s very possible. Apparently, Dagen’s Niheeter has revealed the joint venture is asking for the largest direct grant that’s been sought from the Swedish Energy Agency, which is 13 billion Swedish krona, 1.2 billion to complete the plant.
According to Novo Energy Communications Director, Chr. Jepsen, starting industries like this is very expensive, and financial support is crucial at this stage.
Now, I don’t know about you, but to me, a $1.2 billion US dollar grant when they’ve already received some money, does seem like a lot just for one battery factory that makes… It can be capable of providing EVs, battery packs for 500,000 EVs.
But to be honest, there are bigger battery factories already in China, and it just sounds like a lot of money to me. I’m a bit baffled by the total sum here.
In addition, though, as if this wasn’t already enough, to asking for a substantial grant of taxpayer money, Volvo and Northvolt have applied for state loan guarantees through the local debt office.
It’s not just the financing of the plant that’s proving difficult to secure. According to Dagen’s, NIDA, the factory lacks 70% of the electricity it needs to operate.
Volvo’s EV Sales Goals for 2030
It needs a huge amount of power, and it doesn’t have access to that power. Volvo have announced that they’ll sell only EVs in 2030.
Now, they’re now saying that EVs will be 90 to 100% of their sales in 2030, and the other 10% will be plug-in hybrids.
Either way, Volvo is pretty much all in on EVs.
They have actually, though, blamed the change on a slower than expected rollout of charging infrastructure, a lack of government incentives, and recent uncertainties created by new EV tariffs.
Sweden’s Rapid EV Adoption
Now, those things don’t really apply to Sweden. In Sweden, about 60% of all cars being sold right now are electric cars.
They’re actually second in the world for EV penetration. Very, very, very fast pivot away from internal combustion. Kind of similar to Norway. I mean, not quite that level, but similar.
In a statement talking about this issue, chief executive Jim Rowan, who I believe is one of the best chief executives in the automotive industry from everything I’ve seen from him from the past few years, said the carmaker is resolute in our belief that our future is electric, saying it provides a superior driving experience.
No doubt I agree with that. And increase this for using advanced technologies that improve the overall customer experience.
He added, The transition to electrification will not be linear, and customers and markets are moving at different speeds of adoption.
Whilst that’s true, of course, We’re looking at China has already hit 55%, and that’s the biggest car market in the world.
Of course, economies of scale matters.
A lot of people think that they’ll still be able to buy, for example, an internal combustion engine vehicle for an affordable price in 2035, whatever vehicle they want, but it doesn’t work that way.
I mean, this is how it works. The market dictates the product, not the individual’s. If the market is predominantly EV, you won’t really have a choice.
Importance of Swedish Battery Manufacturing
Now, speaking of choice, does Sweden have a choice? I mean, Sweden’s manufacturing, it doesn’t really make vehicles anymore.
It doesn’t make them in Sweden. It doesn’t make Volvos in Sweden. Polestar’s are not made in Sweden.
But if Sweden was to manufacture batteries, that would give them a pretty impressive manufacturing footprint.
I mean, this is something that there is really no other high-level European country, a wealthy European country that has a large battery factory like this.
This would be the first of its kind in Europe. I think they should do it. Even though, yes, it’s true that technically, a lot of this money would be going to Geely, which is the parent company.
That said, Northvolt is a European company, and that means that 50% of the money, at least, is going directly back into a European-owned business.
Now, a lot of people in Sweden are very patriotic. They love Volvo, and they see Volvo as being Swedish 100 %.
Volvo often says stuff like, Designed in Sweden, engineered in Sweden. Is that really true? Well, I’ll leave it up to you to decide what you want to believe.