Volvo Cars is making moves to shift into gear as an electric vehicle maker, and the company has signed a more than $460 million loan to develop a new all-EV platform.
The financing, provided by the European Investment Bank (EIB), will fund research and development, software development, and implementing next-generation manufacturing technologies for EVs. In addition, the financing will support the brand’s strategy to become a fully electric carmaker and carbon neutral by 2030.
The financing also comes as the European Union continues to push more stringent environmental regulations for road transport. Volvo has the ultimate goal of making all new passenger vehicles sold emissions-free in the coming years.
Volvo expects the financing to result in new EV technologies and innovations, including reduced weight and faster charging for greater efficiency.
“Volvo Cars continues to work diligently towards the ambition of becoming a climate-neutral company by 2040,” CFO of Volvo Cars Johan Ekdahl said in a statement. “One way in which we are aiming to do that is by eliminating tailpipe emissions from our model line-up and investing towards becoming a fully electric car company by 2030. We have a long-term relationship with the EIB and are happy that they continue to support us on that exciting transformation journey.”
EIB also has a goal to finance a shift to a net-zero economy in Europe and across the world.
“I think Sweden can be proud of the leading role Volvo Cars is taking in making the automotive industry more sustainable,” said EIB Vice-President Thomas Östros. “Making cars that run on electricity instead of fossil fuels is only one part of the puzzle. The industry itself is still very carbon-heavy, something that Volvo Cars is actively working on changing. As the EU climate bank, this is one of the many facets in the green transition that we are financing, and we’re glad to partner with Volvo Cars to accelerate the change.”
Volvo has been a leader in the EV transition and was recently touted as one of the positive tipping points in the fight against climate change, according to Tim Lenton, a professor of climate change at the University of Exeter in the United Kingdom. Volvo was also one of a number of companies that urged the leaders of the COP28 -- the 2023 United Nations Climate Change Conference that took place at the end of 2023 -- to phase out fossil fuels entirely.
