Volvo has announced that it will start to produce electric motors at its engine plant in Skövde, Sweden as it marches towards establishing an all-electric lineup.
The car manufacturer will invest 700 million Swedish kroner ($82.5 million) in order to establish complete in-house production of electric motors by the middle of the decade. In the first stage, the Skövde factory will simply assemble electric motors while at a later stage it will bring the full manufacturing process in-house.
“The very first Volvo from 1927 was powered by an engine built in Skövde,” Javier Varela, senior vice president of Industrial Operations and Quality at Volvo, said. “The team is highly skilled and committed to delivering on the highest quality standards. So it is only fitting that they will be a part of our exciting future.”
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The design and development of the electric motors currently used by Volvo takes place in Gothenburg, Sweden and Shanghai, China. When production of electric motors at the Skövde site commences, the production of internal combustion engines will be transferred to a separate subsidiary of Volvo, Powertrain Engineering Sweden, which will be later merged with Geely’s combustion engine operations.
Volvo wants half of its global sales to be all-electric models by 2025, with the rest being hybrids. Speaking with the media recently, chief executive Hakan Samuelsson said he would be surprised if Volvo was producing anything other than electric vehicles from 2030.
“The way forward would be to have clear rules on when we need to exit the combustion engine,” Samuelsson stated earlier this month. “Once you have realized that the petrol and diesel engine are really not part of the future, it’s rather easy to see you have to move fast into the new world.”