In accordance with the European Union’s push for a green transition, Volvo Car Corporation and the European Investment Bank (EIB) have signed a €420 million (AU$684.5 million) financing agreement in support of Volvo’s decision to become fully electric and carbon neutral by 2040.
Volvo Cars CFO Johan Ekdahl stated that one way in which the company is aiming to achieve this goal is through “eliminating tailpipe emissions from Volvo’s model line-up and investing towards becoming a fully-electric car company by 2030.”
The operation is expected to contribute to the decarbonisation of road transport — which is a major source of emissions and pollution across the globe.
The funding from the EIB will support the development of a new, fully-electric car platform, as well as the necessary research, development and roll-out of resource-efficient and advanced manufacturing technologies for EVs.
The EU has introduced progressively stricter environmental regulation for road transport, as they aim to have all new passenger vehicles sold emissions free by 2035.
This target should promote significant advancement for EVs — for example: increased sustainability, more light-weight vehicles and faster charging speeds — hence, lowering the barriers for switching to electric cars.
EIB Vice-President Thomas Östros said: “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.”
EIB said the investment is in line with their goal to finance a seamless transition to a net zero national and global economy.
“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,” said Östros.
