Volvo started with 10 potential suppliers for its long-term EV battery needs and over that last year reduced the number to two, CATL and LG Chem, that met the automaker’s requirements.
“This included technology leadership, quality leadership, program timing, sustainability and openness,” Volvo Board Member for Procurement Martina Buchhauser told Automotive News Europe.
It was also crucial to Volvo that the suppliers have a global reach so they can supply the automaker’s vehicle production sites in Europe, the United States and China.
Buchhauser said the breadth of this network also “mitigates any supply risks that could be on the horizon” in the event of a natural disaster or other issues that hinder the supply of a component that, if Volvo has its way, will be the heart of half its worldwide sales by 2025.
European suppliers didn’t make the cut because they currently lack the global reach of China’s CATL and South Korea’s LG Chem, both of which have or are building factories in Europe and Asia.
Buchhauser said Volvo will now begin intense collaboration with CATL and LG Chem. Each will work closely with the automaker’s r&d department to make sure Volvo’s electric powertrains “will be among the leaders” in the industry, she said.