Volvo is making a bold move in the EV battery race. The automaker has signed an agreement to take full ownership of NOVO Energy, its battery production joint venture with Northvolt. This shift gives Volvo complete control over its battery strategy, but it also raises big questions about future production and supply chain stability.
The Deal: Volvo Buys Out Northvolt’s Stake
Under the agreement, Northvolt will sell its shares in NOVO Energy to Volvo, making the automaker the sole owner of the company. The deal still requires approval from the United States Bankruptcy Court for the Southern District of Texas and Sweden’s Inspectorate of Strategic Products. Once approved, the transfer will be finalized.
Despite this major shift, Volvo reassures investors that it won’t impact other planned investments or cash flow objectives. Additionally, both companies have signed a framework agreement to explore future collaborations, including potential battery supply deals in North America.
What Happens to NOVO Energy?
NOVO Energy was founded in 2022 to produce high-performance EV battery cells for Volvo. The company’s 50 GWh battery factory in Gothenburg, Sweden, started construction in September 2023, with production expected to begin in 2026.
However, this ownership change raises concerns about whether Volvo can keep the project on schedule. With Northvolt exiting, Volvo will need to manage battery development and production alone—a complex and costly challenge.
Why This Matters for Volvo’s EV Future
Volvo’s decision to take full control of its battery supply chain signals its commitment to long-term EV production. With battery technology being the most critical factor in EV performance and cost, this move could give Volvo a competitive edge—but only if it can successfully execute its plans.
With the global demand for EVs growing and supply chain issues still lingering, the question now is: Can Volvo scale battery production fast enough to meet its ambitious electrification goals?
