Volvo Cars ill assemble electric motors at its powertrain plant in Skövde, Sweden, and plans to establish complete in-house e-motor production by mid-decade. It will invest 700 million SEK to this end in coming years.
 
The company is committed to becoming a premium electric car company and aims for its global sales to consist of 50 per cent fully electric cars by 2025, with the rest hybrids.
 
The Skövde operations have been part of the Volvo Cars story ever since the company’s founding in 1927. Adding e-motor production to the plant’s activities means the historic ground in Skövde will be a part of the company’s future as well.
 
Volvo Cars announced earlier this year that it is investing significantly in the in-house design and development of e-motors for the next generation of Volvo cars. With the planned investments in Skövde, it now takes the first steps towards in-house e-motor assembly and manufacturing.
 
In a first stage, the Skövde facility will assemble e-motors. At a later stage, the company intends to bring the full manufacturing process for e-motors in-house into a facility in Skövde.
 
“The very first Volvo from 1927 was powered by an engine built in Skövde,” said Javier Varela, senior vice president of Industrial Operations and Quality. “The team is highly skilled and committed to delivering on the highest quality standards. So it is only fitting that they will be a part of our exciting future.”
 
Taking over the role of the internal combustion engine in car engineering, e-motors are a fundamental building block of electric cars, together with the battery and power electronics. The interplay between these three component areas is crucial in developing premium electric cars.
 
Bringing the development and production of e-motors in-house will allow Volvo Cars engineers to further optimise electric motors and the entire electric driveline in new Volvos. This approach will allow engineers to make further gains in terms of energy efficiency and overall performance.
 
Design and development of the company’s electric motors takes place in Gothenburg, Sweden and Shanghai, China. Earlier this year Volvo Cars opened a new electric motor lab in Shanghai, in addition to ongoing e-motor development in Gothenburg, Sweden and state-of-the-art battery labs in China and Sweden.
 
The remaining activities at the Skövde engine plant, focusing on the production of internal combustion engines, will be transferred to a separate subsidiary of Volvo Cars, named Powertrain Engineering Sweden (PES). PES is intended to be merged with Geely’s combustion engine operations, as announced earlier.

Q&A: Future e-motor production in Skövde

Q: When will e-motor production in Skövde start?

A: Full e-motor production is planned to start mid- decade. In a first step leading up to that, there will be assembly in Skövde. PES will be manning Volvo Cars e-motor operations in the plant. 

Q: So will you assemble e-motors or will you produce them?

A: In a first step there will be assembly of e-motors for CMA based EV models. Mid-decade there will be production of e-motors at the Skövde plant for the next generation cars.

Q: Will Skövde produce e-motors for Volvo Cars globally?

A: The plan is for Skövde to mainly supply our European plants in Ghent and Torslanda. But there is potential to supply other car plants as well. Further details on our plans for future e-motor production will be shared at a later stage, there are no decisions yet. 

Q: How many jobs are created through these plans?

A: The majority of people who will be working with the e-motors will be contracted from PES. Initially we are only talking about a limited number, but by mid-decade it’s expected that up to 500 people of in PES workforce will be involved in the production. The exact number of people involved will depend on market development and model mix. Volvo Cars aims for half its sales to be made up of full electric cars by 2025, and the rest hybrids. 

Q: Will Volvo Cars produce e-motors at other locations as well going forward?

A: Further details on our plans for future e-motor production will be shared at a later stage. We are working on those plans, but there are no decisions. Volvo Cars ambition is to source where we produce. Already today we assemble electrical powertrains in China for the PS2 and XC40 BEV.

Q: Do you produce e-motors in ZJK today?

A: Yes, we assemble first generation electrical powertrains in China for the PS2 and XC40 BEV.


Q: Why keep e-motor production in Skövde when the internal combustion engine operations are separated?

A: The separated engine operations, PES, will be contracted to supply the workforce for the assembly of e-motors. In this setup, Volvo Cars has control of its e-motor production, while leveraging the group, and the hub of expertise in Skövde. 
Our ICE operations will be separated into a standalone subsidiary to Volvo Cars, with the potential to merge with Geely’s powertrain unit as a next step. This allows for better group synergies for those years when internal combustion engines will still have a role to play. Together with the Geely Powertrain JV, the ICE unit in Skövde will be a stronger and more competitive player at the world market.
Skövde is a powertrain expertise hub where we see potential in building from that expertise as we introduce our own e-motors. 

Q: But everyone knows that it takes fewer people to construct e-motors than ICE engines. How will this affect the people employed at Skövde going forward?

A: Our ICE operations in Skövde will be separated into a standalone subsidiary of Volvo Cars, with the potential to merge with Geely’s powertrain unit as a next step. This allows for better group synergies for those years when internal combustion engines will still have a role to play. The standalone company can also sell ICE engines to OEMs outside of the Geely group. On top of that, Volvo Cars will contract the new company to supply people for the assembly of e-motors. How many people will work in the new company in the future will depend on a combination of future demand for its ICE products as well as on demand for electric vehicles.

Q: What influence will the future PES company have on e-motor production?

A: PES will be a key partner in Skövde in supplying expertise and manning for the installations and manufacturing processes for the new e-motor production.

Q: What volumes of e-motors are you expecting to produce in Skövde?

A: That depends on market development and sales model mix. We aim to grow our volumes over the next few years, and for half our sales to be made up of full electric cars by 2025, the rest hybrids. 

Q: How much will you invest in the e-motor production in Skövde?

A: Volvo Cars currently plans to invest around SEK700 million in the production of e-motors at Skövde. The money will mainly be spent on production equipment.

Q: Will Skövde also build e-motors for other Geely group companies? Polestar? Lynk & Co?

A: That is a question for Polestar and Lynk & Co. 

Q: What happens after 2030? Will the cooperation with PES in Skövde continue even when you do not need hybrid powertrains? 

A: Our ICE operations in Skövde will be separated into a standalone subsidiary to Volvo Cars, with the potential to merge with Geely’s powertrain unit as a next step. This allows for better group synergies for those years when internal combustion engines will still have a role to play. The standalone company can also sell ICE engines to OEMs outside of the Geely group. On top of that, Volvo Cars will contract the new company to supply people for the production of e-motors. How many people will work in the separated company in the future will depend on a combination of future demand for its ICE products as well as on demand for electric vehicles.