Volvo Cars has announced plans to build a new manufacturing plant in Europe that will be dedicated exclusively to fully electric vehicles, supporting its goal of becoming an electric-only brand by 2030.
Located in eastern Slovakia, the new facility will cost around €1.2 billion ($1.25 billion) and will add to Volvo Cars' existing factories in Torslanda (Sweden) and Ghent (Belgium) when it becomes fully operational in 2026.
Construction on the new plant, located close to Kosice in the eastern part of Slovakia, will start in 2023, with equipment and production lines to be installed during 2024. Series production of next-generation, pure electric Volvo cars is scheduled to start in 2026.
The new factory is designed to produce up to 250,000 cars per year and is expected to create several thousand new jobs in the region. Volvo says the site also allows for further expansion of the plant in the future. The company did not offer additional details about the EVs it will build in Slovakia.
"Expansion in Europe, our largest sales region, is crucial to our shift to electrification and continued growth. I am very pleased to expand our Volvo Cars production footprint into Slovakia and look forward to welcoming new colleagues and partners on the journey ahead."
Jim Rowan, chief executive at Volvo Cars
The plant will use only climate neutral energy, supporting Volvo Cars' ambition to have climate neutral manufacturing operations by 2025. It will feature an optimized layout and logistics flow, as well as offer "the highest global standards in energy and environmental efficiency."
Set to become the fifth car plant in Slovakia, Volvo Cars' facility will benefit from Kosice's good logistical and transport links to the rest of Europe and access to a good supplier base. A key factor for the decision to locate the plant in Kosice were the incentives offered by the Slovak government, estimated at 20% of the total investment or around €240 million ($251 million).
Alongside Volvo Cars' existing factories in Europe, the US and Asia, the new plant in Slovakia will help the company achieve its ambition to reach annual sales of 1.2 million cars by 2025.
The Kosice plant will represent the first new European manufacturing site for Volvo Cars for almost 60 years, as the Torslanda and Ghent facilities opened in 1964 and 1965, respectively. The Swedish automaker's three European plants will have a combined annual output of 600,000 cars.
