New Volvo China plant for EVs

Volvo is spending five billion yuan (NZ$1b) on a new plant for its Polestar brand, the factory under construction in Chengdu, Sichuan Province, China.

It will release three electric vehicle models by 2021, the Nikkei Asian Review reports.

Earlier this year the company announced that every new Volvo from 2019 will have an electric motor.

Volvo revealed the Polestar 1, a four-seat, two-door plug-in-hybrid coupe, in Shanghai in October. Using carbon fibre to save weight, the new premium model has a 150km range.

“As we have a Volvo factory in China, we have already built a network of suppliers,” Volvo chief executive officer Hakan Samuelsson told the Nikkei.

“China is probably going to be the market where electrification will be introduced fastest; already today half of [all] EVs are sold in China. The Chinese government is very positive that they are promoting electrification, so this market is very interesting for us.”

Polestar 1 production is expected to start early in 2019. Later that year Volvo will release the smaller and more affordable Polestar 2 designed to compete with Tesla’s Model 3.

Starting with the Polestar 2, Volvo will make all models entirely electric.

The five billion yuan investment to build the new plant and develop new models will be jointly made by Volvo and its parent Zhejiang Geely Holding Group. Polestars built in China will be exported to the US, Europe and Japan.

“In China there is huge demand for premium cars, and we have confidence in premium electric cars,” Samuelsson says.

He suggests that Volvo will develop markets extensively in China in cooperation with Geely, pursuing growth in the market’s middle segment.