Volvo Cars was the first legacy automaker to come out and set a target for when it would produce only 100% electric cars, and it has long had a focus on safety, including safety of the planet/environment. This week, it’s taking that leadership forward again by announcing a third factory in Europe, one that will produce electric cars and capture future growth potential.
Volvo Cars aims to be producing only fully electric vehicles by 2030, and it aims to be climate neutral by 2040. All the while, it intends to keep growing. The new factory will have a production capacity of 250,000 electric cars a year once it’s up and running.
“We have a clear focus on becoming a pure electric mobility brand by 2030, which is in line with our purpose,” said Jim Rowan, chief executive at Volvo Cars. “Expansion in Europe, our largest sales region, is crucial to our shift to electrification and continued growth. I am very pleased to expand our Volvo Cars production footprint into Slovakia and look forward to welcoming new colleagues and partners on the journey ahead.”
This factory will be near Kosice in eastern Slovakia, which has important geometric implications according to the company. “Volvo Cars creates a European triangle of manufacturing covering its largest sales region — complementing the Ghent plant (Belgium) in western Europe and the Torslanda plant (Sweden) in northern Europe.”
This will be the fifth car plant in the country, so it should benefit from a strong automotive supply chain and workforce.
This is part of Volvo Cars’ plan to grow while electrifying more and more. That may sound natural, but it should be noted that the automotive market has been shrinking for a couple of years and there’s a serious Osborne effect challenge within the industry now as more and more people want electric cars but most of the automotive production capacity around the world is set up for fossil fuel powered cars. That is surely part of the reason why Volvo Cars aims to electrify so quickly — it has long seen the window as fairly short and coming fast.
“Volvo Cars has an ambition to move towards annual sales of 1.2 million cars by mid-decade, which it aims to meet with a global manufacturing footprint spanning Europe, the US and Asia,” the company states. Five years after that, Volvo Cars is supposed to be 100% electric. Without a doubt, any new Volvo Cars manufacturing facility is going to be for fully electric vehicles.
This is actually going to be the first European manufacturing expansion for Volvo Cars in nearly 60 years! The last time a new factory was opened on the Old Continent was when the Ghent factory was opened in 1965. Combined with the Torslanda factory set up a year earlier, the production capacity of those two “latest” additions to Volvo Cars production facilities totals 600,000 vehicles a year. So, a 250,000 unit production boost is a big step forward for the moderately sized automotive company.
Naturally, Slovakia is very happy with the news of the new factory location. “I appreciate that Volvo Cars has decided to build its new plant in Slovakia. The new Volvo Cars plant is important for us since it will improve the social and economic situation in the region and produce only electric cars, which provides the Slovak automotive industry with a competitive perspective in the new ecological era,” said the Prime Minister of the Slovak republic, Mr. Eduard Heger.
Construction of the new factory will begin next year, in 2023. Production lines are supposed to be installed in 2024. Full series production of electric cars is supposed to begin in 2026.
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