Volvo to Build an Electric Vehicle Battery Plant in the U.S.
While many people consider Detroit home of the automobile, the southeast region of the U.S. is becoming a hotbed for auto manufacturing. Automakers BMW, Mercedes Benz, Volvo, Toyota, Honda and Hyundai built assembly plants in the region to manufacture vehicles for the U.S. and global markets.
Most recently, Toyota and Mazda recently announced they will be opening a new $1.6 billion plant in Huntsville, Alabama, adding around 4,000 new jobs to the region. Now Volvo becomes the latest automaker to expand its U.S. manufacturing with a new electric vehicle battery plant.
The automaker announced plans to build an electric battery plant at its assembly plant in Ridgeville, South Carolina to support the launch of electrified Volvo models for the U.S. market. Construction of the battery assembly plant will be completed by the end of 2021, a Volvo spokeswoman said to Automotive News.
The battery production plant is part of a previously announced $600 million project that is already underway at Volvo's plant in Ridgeville, S.C., which includes adding a second production line and Volvo Car University. The 2.3 million sq. ft. facility includes a body shop, paint shop, final assembly, a vehicle processing center and an office building.
The Ridgeville plant is Volvo's first in the U.S. Construction began in 2015.
At that facility, employees will assemble and test the lithium ion battery packs that will power the electric XC90. By assembling the packs on at the plant, Volvo hopes to reduce shipping costs involved in transporting the heavy batteries.
Dallas Bolen, a manager with Volvo's product launch group, told local media outlet the Post and Courier that local battery production would be more cost-effective than building batteries off-site then having to transport them to the factory.
The Ridgeville plant is currently the production home of the Volvo S60 sedan. The U.S.-built S60s are exported around the world through the Port of Charleston, one of the busiest ports in the U.S.
Volvo's next EV will be the XC40 Recharge. It will arrive at U.S. dealers later this year.
The South Carolina plant will become the global production center for the third-generation XC90 flagship crossover. Volvo plans to build the next generation XC90 sport utility vehicle in 2022, along with a fully-electric version. The plant has the capacity to build 150,000 vehicles annually.
Volvo has not said how much of the XC90's production at the $1.1 billion factory will be devoted to the battery-electric variant.
That next-generation XC90 will be built on the next version of Volvo's Scalable Product Architecture platform, referred to as SPA2. The new electric vehicle architecture is designed to make it easy to add new technology, such as microprocessors, sensors and camera technology.
Volvo declined to release its production capacity for the battery assembly plant or say how many jobs it will create. Overall, the planned XC90 production line is expected to create about 1,000 jobs.
The XC90 would be Volvo's third battery-powered model following the electric version of the popular XC40 compact crossover, was unveiled in October.
The electric XC40 is expected to arrive in U.S. dealerships in the fourth quarter of 2020. The crossover will be competitively priced under $48,000, after the $7,500 federal tax credit, Volvo said.
The new battery plant will support Volvo's push to electrify around half of its lineup. The automaker aims for EVs to account for half of its global sales by 2025. Over the next five years, Volvo expects to launch a fully electric vehicle every year.
"A Volvo built in 2025 will leave a carbon footprint that is 40 percent lower than a car that we build today," Volvo CEO Hakan Samuelsson said during a press event in October. "We made safety part of the brand. We should do the same with sustainability."
In November 2019, Volvo Cars announced it will be the first carmaker to implement global traceability of cobalt used in its batteries by applying blockchain technology, ensuring that customers can drive battery-powered Volvos knowing the raw materials for the batteries has been responsibly sourced.
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