Sweden. Volvo Car AB

Date of agreement:07 Dec 2022
Customer:Volvo Car AB
Amount in EUR:EUR 200 million
Maturity:8 years
NACE sector / loan type:Research and development

This loan contributes to climate change mitigation: 100%

Financing from NIB Environmental Bond proceeds

NEB-eligible share: 100%

NEB category: Clean transport solutions

Amount disbursed: EUR 200 million

Note: For loans in other currencies than EUR, the equivalent in EUR is based on the exchange rate effective for the disbursement. Read more about the NIB Environmental Bonds


The loan has been provided for R&D investments to develop new battery platforms for fully electric cars during 2022-2023.

Today, Volvo Car AB and subsidiaries (“Volvo Cars”) has two battery electric vehicles (BEV) on the market, the compact SUVs XC40 and C40, which are both built on the company’s first generation Compact Modular Architecture (CMA) platform. The next fully electric BEVs will be based on new platforms that Volvo Cars is currently developing with a considerable element of novelty.

Volvo Cars is a premium car manufacturer founded in Gothenburg, Sweden in 1927. In 2021, the group sold some 700,000 cars in more than 100 countries. The company was listed on the Nasdaq Stockholm exchange in 2021 and is 82% owned by the Chinese company Zhejiang Geely Holding Group. The group employs about 41,000 people and is the largest employer in the Gothenburg area with more than 16,000 employees of which some 10,000 are working with R&D and product development.

Fulfilment of NIB's mandate

Volvo Cars’ current electric vehicle models are based on compact modular architecture (CMA). The group is about to introduce new platforms that will allow for improvements in range, charging functionalities and efficiency in Battery Electric Vehicles for Volvo. The new platforms will extend Volvo Cars’ BEV offerings from mid-size to large model architectures.

While the R&D investments are significant, the development of the platforms is one of the keys to competitiveness in the market, as well-designed platform provides with flexibility and economies of scale. Volvo Cars has research cooperation with Swedish Universities, local sub-suppliers, and research institutes. One of the main strategic initiatives is the joint venture with Northvolt AB involving a construction of a 50 GWh battery manufacturing plant in Gothenburg, Sweden, that would be used for new electric cars.

The R&D investments contribute to the development of skills development in the automotive cluster in Sweden. As the cluster consists of several companies and is significant to the entire economy, there is a high likelihood of notable spill-over effects in the region through the transfer of skills and imitation.

Expected productivity impact from the investment:
• R&D intensity of Volvo Car (ratio)
• Annual R&D expenditures (SEK million)
• Investments in platforms (EUR million)

The R&D investment in cleantech for the electric vehicle sector is in accordance with the manufacturer’s net-zero plans to become a fully electric passenger car brand by 2030. The ambition is to have 50% of its global sales consisting of fully electric cars already by mid-decade.

The clean transport project is fully eligible for funding with NIB Environmental Bond proceeds.

Sustainability summary

The project deals with the electrification of the transport sector and benefits net-zero targets. Materiality issues regarding circularity and sustainable sourcing of materials are expected to be strongly incorporated in the manufacturing practices of the company – especially in the industrialisation and manufacturing phase of the new technology – to ensure a steady and determined directional movement to its circularity and climate goals.