Geely-owned Volvo is laying the groundwork for the eventual transition to a full EV lineup, by establishing a development center for electric motors.

The new R&D center is located in Shanghai, China and became operational in October. The center is being used to develop and test EV technology in collaboration with Volvo's existing powertrain R&D center in Gothenburg, Sweden. Volvo has also established battery R&D centers in China and Sweden.

Volvo in a statement said developing its own electric motors will enable it to optimize the motors and their integration with the rest of the powertrain, i.e. the battery and the control electronics, which in turn should result in gains in terms of energy efficiency and overall performance.

Volvo electric-motor development

Volvo electric-motor development

The first motors being developed at the center will end up in plug-in hybrid and battery-electric cars based on Volvo's SPA2 modular platform debuting in the redesigned XC90. The new XC90 is due around 2022 and will offer the choice of a battery-electric powertrain.

Volvo was among the first of the established automakers to embrace electrification. In 2017 it announced it would add electrification to every vehicle in its lineup within two years, and a year later it announced that it was curbing further development of its internal-combustion engines. Volvo predicts that half its sales will be battery-electric cars by 2025.

Volvo's first EV is the 2021 XC40 Recharge which starts sales later this year with a base price of $53,990. The compact electric crossover SUV has a 402-horsepower dual-motor powertrain, a 78-kilowatt-hour battery, and an estimated range of 200 miles. The same setup features in the 2021 Polestar 2, a compact sedan from fellow Geely brand Polestar.