As part of the deal, CATL will set up a team in Sweden for localised EV battery supply services. It will also follow Volvo Cars' sustainable development strategy with using clean energy for battery production, tracking and managing raw materials.
The agreement covers the global supply of EV battery modules for all models on the upcoming SPA2 Polestar EV and the existing CMA modular vehicle platforms. The deal is a major step in Volvo's electrification strategy, as well as a milestone in CATL's global development. Volvo has also extended its current deal with LG Chem of South Korea for batteries for hybrids.
"CATL is a renowned battery manufacturer which has long and successful track records of supplying lithium ion batteries to the global automotive industry. It fulfils Volvo Cars' strict sourcing guidelines in terms of technology leadership, responsible supply chains and competitive cost models," said spokesperson for Volvo Cars, which is owned by the Chinese Geely group. Other car makers in the group include Lotus, Proton and flying car maker Terrafugia.
The modules will come from CATL's battery plant being built in Erfurt, Germany rather than its Chinese plants. This will start production in 2021, ramping up to produce 14GWh of batteries in 2022 for BMW, VW, Daimler, Jaguar Landrover and the Peugeot group as well as Volvo.
"CATL and Volvo share the same vision in this new energy career, so we choose to realize it together," said a spokesperson of CATL. "With advanced and reliable battery solutions, we will support Volvo to create world-leading electric vehicles that serve global consumers."
Founded in 2011, CATL overtook Panasonic as the largest lithium ion EV btttery supplier in 2018, shipping 21.31 GWh of batteries. It already has offices in Munich and Paris.