Volvo will build a new electric car factory in Slovakia to support its dramatic plans to ditch combustion by 2030 and go climate-neutral by 2040.
It will be the company's third European production site – alongside its original plant in Torslanda, Sweden, and the busier factory in Ghent, Belgium.
Volvo says it chose Slovakia for the new location to create "a European triangle covering its largest sales region".
The firm will invest around €1.2 billion (£1.04bn) in the new plant – its first in Europe since 1965 – which will be located in the east of Slovakia, near the city of Kosice, and have an annual production capacity of 250,000 units.
"It will benefit from a well-established automotive supply chain," said Volvo, citing the four existing large-scale car factories already in operation there. The Volkswagen Group, Jaguar Land Rover, Stellantis and Kia each operate important factories in the west of the country.
The company also notes that incentives offered by the Slovak government were a "key factor" in the decision. Asked by Autocar for more details on these incentives, Slovakia's minister for economy Richard Sulík revealed that the government will give Volvo €267 million (230m) in "direct state aid", and having sold the car firm 330 hectares of land, it will now invest in transport and supply infrastructure in the surrounding area.
Volvo says it expects to bring 3000-5000 new hires on board in Slovakia, at the factory and across the supply chain. Volvo CEO Jim Rowan also revealed that the "large parcel of land" acquired by Volvo could accommodate a future expansion to the production lines, or a dedicated EV battery facility.
Volvo has yet to reveal which models will be built at the Slovakian plant. The upcoming electric replacement for the Volvo XC90 SUV will be built in South Carolina, US, and an £800m transformation of the Torslanda site will see it equipped to build only EVs by 2030. When asked by Autocar, CEO Jim Rowan went only so far as to say: "Suffice to say, all products will be fully electric."
Possible models bound for Kosice production include the next-generation Volvo XC60, due for launch in 2025, and the 'XC20' compact SUV confirmed for 2024.
The expansion of Volvo's production network will help it meet an ambition of producing 1.2 million cars by the middle of this decade.
Construction at the Kosice plant is planned to start in 2023, with the tooling being installed in 2024 and cars heading down the line from 2026. The site will use climate-neutral energy supplies and "will also be designed to be a leader in sustainable and efficient premium electric car production with an optimised layout and logistics flow".