Volvo Cars announced today it will establish a third manufacturing plant in Europe. The new state-of-the-art plant in Kosice, Slovakia, will be climate neutral and build only electric cars, underpinning the company’s ambition to become fully electric by 2030 and climate-neutral by 2040.
By picking Slovakia as the location for its new plant, Volvo Cars creates a European triangle of manufacturing covering its largest sales region, complementing the Ghent plant (Belgium) in western Europe and the Torslanda plant (Sweden) in northern Europe.
1,2 million cars by mid-decade
The new facility represents an investment of around € 1,2 billion, from which 20% is expected to be funded by Slovakian governmental support. It will be located close to Kosice, in the eastern part of Slovakia, where it will benefit from a well-established automotive supply chain as it becomes the fifth car plant in the country.
Volvo Cars has the ambition to move towards annual sales of 1.2 million cars by mid-decade, aiming to meet with a global manufacturing footprint spanning Europe, the US, and Asia. “We have a clear focus on becoming a pure electric mobility brand by 2030, which is in line with our purpose,” said Jim Rowan, chief executive at Volvo Cars.
“Expansion in Europe, our largest sales region, is crucial to our shift to electrification and continued growth. So 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,” he added.
Slovakia is the choice
The establishment of the Kosice plant represents the first new European manufacturing site for Volvo Cars for almost 60 years. The Torslanda plant was opened in 1964, while the Ghent factory followed a year later. Together, these facilities can produce 600 000 cars per year.
The facility in Kosice is designed to produce up to 250 000 cars per year and is expected to provide several thousand new jobs in the region. The site also allows for further expansion of the plant in the future. Construction is planned to start in 2023, with equipment and production lines installed during 2024. Series production of next-generation, pure electric Volvo cars is scheduled to start in 2026.
The plant will use only climate-neutral energy, in line with Volvo Cars’ ambition to have climate-neutral manufacturing operations by 2025. It will also be designed to be a leader in sustainable and efficient premium electric car production with an optimized layout and logistics flow.
“I appreciate that Volvo Cars has decided to build its new plant in Slovakia. The new Volvo Cars plant is important for us since it will improve the social and economic situation in the region and produce only electric cars, which provides the Slovak automotive industry with a competitive perspective in the new ecological era,” said the Prime Minister of the Slovak Republic, Mr. Eduard Heger.
As for the location, Volvo points out that Kosice offers good logistical and transport links to the rest of Europe and access to a good supplier base. The incentives provided by the Slovak government have also been a critical factor in locating the plant in Kosice.