In 2021, Volvo Cars stated it prepared to end up being a “fully electric car company” by the year 2030, a relocation which will need it to have a constant and safe and secure supply of batteries for its cars.
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The brand-new CEO and president of Volvo Cars has actually anticipated that shortage of battery supply will end up being a pushing problem for his sector, informing CNBC the company has actually made financial investments that would assist it get a grip in the market.
“Recently, we made a reasonably substantial investment with Northvolt, so that we are in control of our own battery supply as we go forward,” Jim Rowan, who signed up with business last month, informed CNBC’s “Squawk Box Europe” Thursday.
In March 2021, Volvo Cars stated it prepared to end up being a “fully electric car company” by the year 2030, a relocation which will need it to have a constant and safe and secure supply of batteries for its cars.
“I think battery supply is going to be one of the things that comes into scarce supply in the years to come,” Rowan stated.
“And that’s one of the reasons we made that substantial investment with Northvolt: So that we can be in control not just of the supply, but we can actually start to develop our own battery chemistry and production facilities.”
This would make it possible for Volvo Cars to be “in complete control of that electrical propulsion engine for the future,” he stated.
Gigafactory strategies
In February, Volvo Cars and battery maker Northvolt stated they would develop a battery factory in Gothenburg, Sweden, with building and construction set to start in2023 According to the business, the center is set to “have a potential annual cell production capacity of up to 50 gigawatt hours.”
This would relate to providing sufficient batteries for around 500,000 automobiles every year, they stated. The companies’ strategies to establish a gigafactory had actually been formerly revealed, although a particular area was not validated at the time.
As the variety of electrical cars on our roadways boosts, battery supply will end up being a progressively crucial– and competitive– cog in the automobile sector.
Speaking to CNBC’s Annette Weisbach in 2015, Volkswagen CEO Herbert Diess highlighted simply how crucial battery production would remain in the years ahead, keeping in mind that obstacles did exist.
“Batteries might be, let’s say, a continuous constraint for the growth of EVs over the next five to 10 years,” he stated.
“Because the preparations are substantial. We require a lot energy and cell production … [There is a] substantial supply chain which needs to be established within the next years, which will, that might, cause some restraints.”
More just recently, this month saw Elon Musk highlight the value of lithium, an essential part of the batteries utilized in electrical cars. On April 8, the Tesla CEO tweeted that lithium’s price had “gone to insane levels!”
“Tesla might actually have to get into the mining & refining directly at scale, unless costs improve,” Musk stated. “There is no shortage of the element itself, as lithium is almost everywhere on Earth, but pace of extraction/refinement is slow.”
Volvo’s electrification prepares put it in direct competitors with long-established car manufacturers like Volkswagen, GM and Ford, in addition toTesla Just today, Ford CEO Jim Farley stated his organization prepared to “challenge Tesla and all comers to become the top EV maker in the world.”
During his interview with CNBC, Volvo Cars’ Rowan was asked if there was a hope Musk’s takeover of Twitter would show to be an interruption for the Tesla CEO.
“I have no idea,” he responded. “I know one thing … I will not be getting distracted from what we need to get done. And that is, quite simply, that we need to continue our march towards electrification.”
Rowan was speaking on the exact same day his organization revealed outcomes for the very first quarter of 2022.
Revenue grew by 8% to reach 74.3 billion Swedish krona (around $7.56 billion). Earnings prior to interest and taxes was available in at 6 billion krona, compared to 8.4 billion in the very first quarter of 2021.
The business offered 148,295 automobiles in the very first quarter, which it stated was a 20% drop compared to the exact same duration in 2015.
As with lots of companies, supply chain problems continue to have a result on operations. “Semiconductor constraints continued to gradually improve,” the business stated.
“However, due to a temporary shortage of a specific semiconductor, production was down at the end of the first quarter. This shortage is expected to remain in the second quarter.”
Looking ahead, business stated it was anticipating “supply chains to improve in the second half of the year.”
–Chloe Taylor added to this short article.
