Swedish car manufacturer Volvo Cars plans to invest $1.1 billion (SEK 10 billion) in its Torslanda plant in Gothenburg, Sweden, over the upcoming few years to prepare it for the production of next-generation fully electric cars, according to a statement released Tuesday.
Key details
The company will be using the allocated investments to implement sustainable technologies and production processes in the plant, including the mega casting of aluminum body parts to reduce weight and boost the energy efficiency of the car, a new battery assembly plant, and revamped paint and assembly shops.
Mega casting will reduce complexity in the manufacturing process, minimizing materials and logistics cost, and in turn, the carbon footprint along the production and supply chain networks, the statement added.
The new battery assembly plant will integrate batteries and modules in the car’s floor structure, while the renovated paint shop will allow the deployment of machinery and processes to reduce paint shop energy consumption and emissions.
The 1927-founded Volvo Cars aims to achieve 50% of its sales being pure electric cars by 2015, and 100% by 2030, according to Reuters.
Crucial quote
“With these investments we take an important step towards our all-electric future and prepare for even more advanced and better electric Volvos,” CEO Håkan Samuelsson said in the statement. “Torslanda is our largest plant and will play a crucial role in our ongoing transformation as we move towards becoming a pure electric car maker by 2030.”
Key background
The newly announced investment comes shortly after a joint allocation of $3.27 billion (SEK 30 billion) by Volvo Cars and battery manufacturer Northvolt to develop and produce batteries for Volvo’s next generation, all-electric cars.
Volvo Cars was acquired by Chinese billionaire Li Shufu-owned Geely in 2010 for $1.8 billion. Shufu ranks 95th on Forbes’ list of World’s Real-Time Billionaires, with an estimated net worth of $19 billion as of February 8, 2022.
Financial performance
Volvo Cars sold 50,600 units during the first nine months of 2021, an 18% rise from the 451,100 units sold during the same period of 2020. During these nine months, it generated revenue and net income of $22 billion (SEK 202 billion) and $1.81 billion (SEK 16.6 billion), climbing by 14% and 363% from a year earlier, respectively.
Volvo Cars’ stock traded at $7.49 (SEK 68.78) as of 6:47 PM GST on February 8, 2022, 1.4% higher than its closing price from the previous session, giving the company a market capitalization of $22.3 billion (SEK 205 billion), according to Nasdaq Nordic data.