Volvo on Friday announced plans to construct a battery plant next to its vehicle plant in Gothenburg, Sweden.

The plant is a joint venture with Swedish battery manufacturer Northvolt, and will supply future electric vehicles from Volvo and sister brand Polestar. Adrian Clarke, a former Tesla executive previously linked with the American company's planned plant in Berlin, Germany, will run the joint venture.

Construction of the plant starts in 2023 and the first batteries (cells and packs) should be in production in 2025. Together with a planned R&D center also jointly run by Volvo and Northvolt, around 3,000 jobs will be created at the site.

The plant will have a maximum annual capacity of 50 gigawatt-hours, or enough batteries for half a million vehicles. Volvo is going to need plenty of batteries as the automaker plans to only sell EVs by 2030, at which point its sales could be more than one million vehicles per year. Last year it managed to deliver 698,693 vehicles.

To be environmentally friendly as possible, the plant will rely fully on renewables for its energy needs. It will also look to reduce the use of materials as much as possible during production, for example by implementing circular economy principles, i.e. by reusing and repurposing existing materials and products.

Rival automakers such as BMW and Volkswagen Group are also working with Northvolt to secure batteries. Similar to the Volvo deal, VW Group and Northvolt are constructing a plant together, this time in Salzgitter, Germany. It is due to be operational in 2024.