Volvo has aimed to produce only fully electric cars by 2030 and to become carbon neutral by 2040. In pursuit of this, the company has announced its investment of $1.25 billion into the third factory in Europe in addition to its two plants in Sweden and Belgium.

The new factory will be located near Kosice in eastern Slovakia, which is very important location for the company. 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.

The building of the Slovakia factory will begin in 2023 and production equipment and production lines will be assembled in 2024. The Slovakian government will undertake 20% of the investment. The mass production of the ‘next generation’ electric Volvos will start by 2026.

By ‘next generation’, it means Volvo’s mega casting technology will produce most of the vehicle chassis in one piece with giant aluminum casting machines. Thanks to the new technique that will reduce the production cost and vehicle weight, the new generation Volvo electric vehicles will be able to offer a much longer range compared to their counterparts, and more space for the driver and passengers in the car.

Volvo’s 2025 goal: 1.2 million cars

The Swedish automotive giant plans to produce approximately 250.000 electric cars per year in its third European factory. The company will meet its energy needs from entirely renewable sources and will ensure that the aluminum used in the factory is produced in the most environmental-friendly way.

Volvo predicts that it will increase its annual automobile production capacity to 1.2 million by 2025 with the start of production in Slovakia. European factories will undertake half of this capacity, while facilities in the USA and China will meet the other half.

The company has decided to build a new plant in Slovakia because of not only the European automobile market but also the generous incentive of the Slovakian government. Volvo still sells the most cars in Europe. The company has made significant gains in the Chinese market recently whereas they will continue to be the western-oriented brand of the Geely Group, as can be understood with this investment move.