“There is a strong demand from our customers already today, and by 2030, it is our ambition that at least 35 percent of the products we sell are electric”, Volvo Group chief executive Martin Lundstedt said in a statement.

“This ramp-up will require large volumes of high-performing batteries, produced using fossil free energy and it is a logical next step for us to include battery production in our future industrial footprint”, he added.

The project, which is subject to approvals from relevant authorities, calls for the construction of a plant in Mariestad in southern Sweden, near Volvo’s main powertrain plant.

The site was chosen in order to “benefit from the region’s existing industrial and logistics infrastructure” and its access to Sweden’s “rich supply of fossil free energy”, the company said.

Volvo Group is a wholly-Swedish company that split in 1999 from automobile maker Volvo Cars, which is now owned by Chinese group Geely.