Volvo Cars to invest $1.25 bil to establish third European EV plant in Slovakia

Automaker has decided to invest around Eur1.2 billion ($1.25 billion) to establish a third electric vehicle manufacturing plant in Europe near Kosice, Slovakia, it said July 1.

The plant, which will be Volvo's first new European manufacturing site for almost 60 years, is planned to be climate neutral, be able to produce 250,000 vehicles/year and only manufacture EVs.

Construction of the plant is due to start in 2023, with equipment and production lines installed during 2024 and EV production to start in 2026, Volvo said.

Kosice was chosen as the location, due to good logistical and transport links to the rest of Europe, access to a good supplier base and attractive incentives offered by the Slovak government, the automaker said.

The Kosice plant will complement Volvo's Ghent plant in Belgium and the Torslanda plant in Sweden, and help the company become fully electric by 2030 and climate neutral by 2040

"Expansion in Europe, our largest sales region, is crucial to our shift to electrification and continued growth," Volvo Cars CEO Jim Rowan said.

The Torslanda and Ghent plants have a combined capacity of 600,000 vehicles/year.

Volvo aims to sell 1.2 million vehicles/year globally by 2025.

Increased demand for EVs have boosted battery metal prices, with Platts' seaborne lithium carbonate and lithium hydroxide assessments have risen 107.1% and 133.4%, respectively, since the start of 2022 at $70,000/mt CIF North Asia and $74,000/mt CIF North Asia as of June 30, according to S&P Global Commodity Insights data.