NINGDE, Fujian – Contemporary Amperex Technology Co., Ltd. (CATL), one of the largest lithium-ion battery suppliers in the world for electric vehicles, has signed a long-term agreement with Volvo Car Group for the global supply of battery modules for all models on the upcoming SPA2 and existing CMA modular vehicle platforms.
The agreement, announced on May 15 jointly by the two partners, will cover next generation Volvo and Polestar models over the coming decade and is part of the multi-billion-dollar supply agreement the Swedish carmaker signed with CATL and LG Chem.
Based on the “customer-centric” cooperation philosophy, CATL will provide localized services with a local team in Sweden for localized battery supply services and more efficient communications. To assist Volvo Cars to improve efficiency, sustainability and transparency of its overall supply chain, CATL will also follow Volvo Cars’ sustainable development strategy with using clean energy for battery production, tracking and managing raw material supply. The battery of this deal will also come from CATL’s overseas plant.
“CATL and Volvo share the same vision in this new energy career, so we choose to realize it together,” said a CATL spokesperson. “With advanced and reliable battery solutions, we will support Volvo to create world-leading electric vehicles that serve global consumers.”
As early as 2017, Volvo Cars announced its strategic decision of overall electrification as a forward-looking pioneer in car industry. It announced then that all new Volvo cars launched from 2019 would be electrified. That strategy has since been reinforced with a new target to have fully electric cars make up 50 percent of its global sales volume by 2025. The cooperation represents a major step towards realizing Volvo Cars’ ambitious electrification strategy, as well as a milestone in CATL’s global development.
“CATL is a renowned battery manufacturer which has long and successful track records of supplying lithium ion batteries to the global automotive industry,” said Volvo Cars in a statement. “It fulfils Volvo Cars’ strict sourcing guidelines in terms of technology leadership, responsible supply chains and competitive cost models.”
“The future of Volvo Cars is electric and we are firmly committed to moving beyond the internal combustion engine,” said Håkan Samuelsson, president and CEO of Volvo Cars. “Today’s agreements with CATL and LG Chem demonstrate how we will reach our ambitious electrification targets.”
“With today’s agreement we effectively secured our battery supply for the upcoming decade,” said Martina Buchhauser, senior vice president for procurement at Volvo Cars. “By having two suppliers available in each region we also ensure that we have flexibility in our supply chain going forward.”
Volvo Cars’ first battery assembly line is currently under construction at its manufacturing plant in Ghent, Belgium. It will be finalized by the end of this year and the first fully electric Volvo to be built in Ghent is the award-winning XC40 small SUV. The plug-in hybrid variants of the XC40 are already manufactured there.
The Compact Modular Architecture (CMA) currently underpins the XC40, as well as the fully electric Polestar 2 fastback and several models sold by LYNK & CO, Volvo’s sister brand which it co-owns with Geely. As of this year, all three models will be built on a single production line at a Volvo-operated manufacturing plant in Luqiao, China.
The upcoming SPA2 architecture is the next generation of Volvo’s in-house developed Scalable Product Architecture (SPA) and will be launched early next decade. SPA is one of the most advanced vehicle platforms in the car industry and currently underpins all Volvo models in the 90 and 60 Series. The first Volvo to be launched on SPA2 will be the next generation of the XC90 large SUV.
Earlier this year, Volvo Cars revealed a number of upgraded and newly-developed electrified powertrain options, to be made available across its entire model range going forward. It has upgraded its existing T8 and T6 Twin Engine plug-in hybrid powertrains, with plug-in options now available on every model it produces.
CATL sold about 21.31 GWh of batteries in 2018, ranking No. 1 in the global electric vehicle battery industry in terms of shipment, according to SNE Research. Headquartered in Ningde, Fujian Province, CATL has more than 24,000 employees around the world and branch offices in Shanghai, Jiangsu, Qinghai, and Beijing in China as well as in Munich, Paris, Detroit, Yokohama. The company’s primary battery production plants are located in Fujian, Jiangsu and Qinghai in China, and the Europe plant located in Erfurt, Germany is under construction. In June 2018, CATL became a publicly listed company on the Shenzhen Stock Exchange.