Sweden Automaker Volvo Car Group has planned to expand its electric vehicle (EV) business and invest 1.2 billion euros ($1.25 billion) to build an EV plant of Volvo Cars in Slovakia.
The EV plant of Volvo Cars is third in Europe and will build electric vehicles (EV) only, in line with the company’s ambition to produce EVs exclusively by the end of this decade.
“Expansion in Europe, our largest sales region, is crucial to our shift to electrification and continued growth,” Chief Executive Jim Rowan said in a statement.
The shift is ahead of an EU goal, backed by European Union countries, to phase out new fossil fuel car sales by 2035.
The EV plant of Volvo Cars in Kosice in eastern Slovakia is designed to produce up to 250,000 cars per year and is expected to provide thousands of jobs. The plans also allow for future expansion, the company said in a statement.
“Volvo Cars has the ambition to move towards annual sales of 1.2 million cars by mid-decade, which it aims to meet with a global manufacturing footprint spanning Europe, the United States and Asia,” it said.
The investment bolsters Slovakia’s position as the world’s largest car manufacturer per capita with more than 1 million cars produced in four plants in the country of 5.4 million in 2021.
“I am very pleased that Slovakia succeeded in the competition for this mega-investment that will bring development and many jobs to the east of Slovakia,” Economy Minister Richard Sulik said in a statement.
Volvo Cars’ output last year rose by 5.6% to almost 700,000 automobiles, of which 27% were either fully electric or plug-in hybrids.
The company’s other European plants are in Belgium and Sweden.