Volvo to open dedicated electric car plant in Slovakia

Volvo Cars will open a dedicated electric car factory in Slovakia — its first new plant in Europe in 60 years — as it seeks to strengthen its position in its continental heartland in the shift to only selling battery vehicles.

The Swedish carmaker, which is backed by China’s Geely, will spend €1.2bn on a new plant in Košice, in the east of the country that already boasts factories belonging to Volkswagen, Stellantis, Kia and Jaguar Land Rover.

About a fifth of the investment will be in the form of Slovakian government support.

“It’s been almost 60 years since we put up a new factory in Europe,” said Volvo chief executive Jim Rowan. “When you build a ground-up factory, then you can take massive advantages of the design element.”

He added: “Our biggest sales region is Europe, and the demand for products, especially BEV [battery electric vehicle] products, is extremely high.”

Carmakers across Europe are repurposing factories to produce electric vehicles as the region shifts towards cleaner vehicles, with many using the opportunity to slim down their production operations.

Ford this month indicated it will stop building cars at Saarlouis in Germany after selecting its Valencia plant for its next electric model, while Jaguar Land Rover previously said it will end production at its Castle Bromwich site in the UK.

But Volvo, which aims to increase sales from 700,000 last year to 1.2mn by the middle of the decade, says it needs to increase capacity to meet its long-term ambitions.

The carmaker already has sites in Belgium and Sweden that can make 600,000 cars a year, as well as China and the US that can produce a further 800,000.

Rowan said that all of its current factories would switch to making electric cars this decade, with no plans to close any of its sites.

The brand is also in the process of expanding its model range, and has already said it will build a new, smaller electric sport utility vehicle in future.

Its Slovakian plant will have an initial capacity of 250,000 when it opens in 2026.

The company has an adjacent site lined up for future expansion, and also has an area on the site that it can use for a battery factory if needed.

It is currently making a battery cell factory at Torslanda in Sweden, and will decide whether to build an additional cell site in Slovakia. “We will learn from the new facility we are building here,” said Rowan.

Volvo already plans to assemble the battery packs, as well as the electric motors, within the new Slovakian car plant.

The group, which is aiming to sell only electric cars by 2030, believes that a new factory can bring greater efficiency.

The site would use clean energy, and have higher levels of automation than a traditional factory, he said, as well as a more efficient use of floor space.

“You can design it quite differently,” he said, in contrast to “people starting with an ICE [internal combustion engine] factory and bolting on BEV capability”.