Volvo Cars will invest 1.2 billion euros ($1.25 billion) to build a new manufacturing plant in Kosice, Slovakia, capable of making 250,000 electric vehicles a year, the automaker said on Friday.
Volvo aims to be an electric-only brand by 2030 and to reach that goal it has said it would need to add another plant in Europe.
Construction of the Kosice factory is set to start next year. Series production of Volvo’s next-generation EVs is scheduled to start in 2026, the company said, adding that about 20 percent of the investment is expected to be covered by the Slovakian government.
“Expansion in Europe, our largest sales region, is crucial to our shift to electrification and continued growth,” Volvo CEO Jim Rowan said in the release.
Volvo’s first new plant in Europe in almost 60 years will be it’s third in the region, joining factories in Torslanda, Sweden, and Ghent, Belgium, which have a combined annual capacity of 600,000 vehicles.
Volvo executive board member Bjorn Annwall said last year that for the automaker to go beyond a target of selling 1.2 million vehicles annually in 2025 it would need to add another plant.
Volvo, which aims to have climate neutral manufacturing operations by 2025, said the plant will only use climate neutral energy.
Volvo’s plant will be the fifth vehicle assembly factory in the country. The other plants are between 250 and 450 km away in Bratislava (Volkswagen Group), Tranva (Stellantis), Zilina (Kia) and Nitra (Jaguar Land Rover).