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Volvo Signs $56 Billion Deals to Buy EV Batteries

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Volvo Car Corp. has signed deals worth an estimated €50 billion ($56 billion) to buy batteries for its electric cars from two Asian suppliers between now and 2025.

The agreements, which include supplying Volvo’s Polestar electric sub-brand, are with China’s CATL (Contemporary Amperex Technology Co. Ltd.) and South Korea’s LG Chem Ltd. Volvo already sources batteries from LG Chem for its hybrid models.

Volvo has said that each new model it introduces from 2020 will be equipped with a hybrid or all-electric powertrain. The company expects half the cars it sells by 2025 will be fully electric. That volume suggests the company will need about 500,000 batteries per year by then, the Financial Times says.

Volvo’s first all-electric offering, due next year, will be a battery-powered version of its XC40 small crossover vehicle. The car will be produced at Volvo’s factory in Luqiao, China, which already makes piston-powered versions of the XC40.