Volvo, too, firmly subscribes to the "local for local" philosophy when it comes to batteries, even if it will not build its own cells.
"There is a big benefit from having a local supply of batteries, which are both big and costly and also hazardous to transport due to their chemical set up," Volvo Chief Technical Officer Henrik Green told Automotive News Europe. "Our strategy going forward is to have a local supply of batteries in America, Europe and China."
"When that flow is optimized, it gives you big benefits in terms of cost," Green added, citing tariffs as well as shipping expenses.
Daimler is skeptical about diving into cell production, CEO Ola Kallenius said last month. "We don't think it's a good idea to build our own cells," he said, adding that if technology shifted abruptly, it "could cost us billions in capital." Instead, Daimler has taken an equity stake in Chinese cell maker Farasis Energy.
"The contract will provide a secure source of battery cells for Mercedes-Benz's electrification strategy, while Farasis gains security for its planned construction of production capacity," Daimler said in July.
Farasis plans a factory in Bitterfeld-Wolfen, Germany, creating up to 2,000 new jobs, but it will not be the sole supplier to Mercedes, Daimler said.
BMW is building a pilot cell factory in Parsdorf, near Munich. The automaker has not committed to building its own cells, but it says the pilot plant and its own research will focus on "optimizing production efficiency, costs and quality" with suppliers. Separately, BMW has committed to using some of Northvolt's Swedish production, and has research projects with Northvolt and Umicore, a Belgian company working on cathodes.
The biggest player of all, Volkswagen Group, which has committed tens of billions of euros to developing electric vehicles across its many brands, is preparing to build a cell factory in Salzgitter, Germany, in a joint venture with Northvolt. The factory will have an initial capacity of 16 gigawatt-hours when it comes online in either late 2023 or early 2024. But it will be just a fraction of VW Group's power demand for its electrified vehicles, which the company says will be 150 gWh by 2025.
"Automakers want a regionalized market for this industry," said Jesper Wiegardt, vice president for communications and public affairs at Northvolt. "It's no longer a question of if it will happen. We're past that point. The question now is will there be a fully integrated European supply chain, with battery manufacturers, raw materials suppliers, and R&D."
Without this, Europe is at risk of losing a considerable number of jobs, he added.