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Volvo signs long-term agreements with CATL, LG Chem for EV batteries

The two suppliers will provide batteries for both Volvo and Polestar.

If Volvo wants EVs and PHEVs to comprise a plurality of its sales in the future, it'll need the batteries to build all those cars.

You can't build an electric vehicle without batteries. I mean, you can, but it wouldn't be a very good car. To that end, Volvo has shored up the juice-holding side of its electrification plans with two major agreements.

Volvo announced on Wednesday that it has signed long-term agreements with both LG Chem and CATL. These two suppliers will provide Volvo and Polestar with the batteries they need to continue building electrified vehicles as the former ramps up its electrification plans and the latter prepares to introduce its first PHEV and EV.

"With today's agreement we effectively secured our battery supply for the upcoming decade," said Martina Buchhauser, SVP for procurement at Volvo Cars, in a statement. "By having two suppliers available in each region we also ensure that we have flexibility in our supply chain going forward."

The batteries will end up in vehicles on the SPA2 and CMA platforms. Volvo is currently building out its battery assembly line in Ghent, Belgium. The CMA-platformed XC40 plug-in hybrid is already built there, but soon, a battery-electric version of the XC40 will be assembled there, as well. The Polestar 2 rides on the CMA architecture, too. As for SPA2, that's a new platform evolved from the original SPA platform on which the 90 and 60 series cars are built. The first vehicle on SPA2 will be the next-generation XC90, which should be introduced in time for the 2021 model year.

Volvo first announced its electrification plans in 2017. Starting this year, every new Volvo vehicle launched will carry an electrified variant, whether that means a plug-in hybrid or a battery-electric powertrain. The automaker hopes that proper EVs will comprise 50% of its global sales volume by 2025.