Swedish automaker Volvo has just secured an astounding €420 million ($460M) loan from the European Union’s funding arm to support its efforts to fully electrify its portfolio by the end of the decade.
Financing agreement details
According to the press release, Volvo Car Corporation and the European Investment Bank’s (EIB) inked a financing agreement worth €420 million ($460M) on January 4 to fund the automaker’s new all-electric vehicle platform development.
This enormous investment will cover Volvo’s upcoming initiatives in R&D necessary to develop the new platform. It will also support software development and next-gen production tech implementation for all-electric vehicles to ensure efficient rollout.
The EIB expects the project to enable next-gen EVs with safer and more sustainable technologies such as lower overall weight and faster charging capability. In this sense, the partnership aligns with the bank’s mission to support a “just and swift transition to a net-zero economy, both in Europe and across the world.”
EIB Vice-President expressed his delight with the company’s newly formed partnership with Volvo.
“I think Sweden can be proud of the leading role Volvo Cars is taking in making the automotive industry more sustainable. 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.”
EIB Vice-President Thomas Östros
Volvo to become an all-electric brand by 2030
EIB’s financial support for Volvo can significantly aid the automaker’s efforts to advance as an all-electric brand by 2030 amid the global shift to sustainable mobility.
It is a crucial part of Volvo’s efforts to hit carbon neutrality across its global operations by 2040.
“Volvo Cars continues to work diligently towards the ambition of becoming a climate-neutral company by 2040. 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.”
Volvo Cars CFO Johan Ekdahl
Volvo’s EV advancement
Volvo’s significant push to join the shift to electric vehicles is undoubtedly bearing fruit, with the automaker anticipating “strong double-digit” sales growth in 2024.
It also expects to witness a major surge in demand for its compact-size EX30 EV with a base price of just about $35,000, according to Electrek. In addition, the Swedish legacy automaker also recently introduced its new 300-mile EX90 e-SUV. It will become available starting early this year for a base price of $76,695.
Notably, Volvo set a target of approximately 600,000 EV sales by 2025, representing about 50% of the overall 1.2 million vehicle sales. It would not be surprising if Volvo managed to hit its ambitious targets, considering the strong demand for its EVs in the global market.
