Volvo Car signs €420M loan agreement with EIB to go fully electric by 2030

Göteborg-based Volvo Car Corporation, a motor vehicle manufacturer, and the European Investment Bank (EIB) have entered into a €420M financing agreement to support Volvo’s commitment to becoming fully electric and carbon neutral. 

This move aligns with the European Union’s efforts for a green transition and aims to contribute to the global decarbonisation of road transport, addressing a major source of emissions and pollution.

EIB VP, Thomas Östros says, “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,” adds Östros.

Capital utilisation

The funds will support Volvo’s shift to a fully electric and carbon-neutral approach. This funding will help in the development of an electric car platform, research and development, and advanced manufacturing technologies. 

Aligned with EU regulations, the project aims for emissions-free new passenger vehicles by the mid-next decade, fostering safer and more sustainable electric vehicles with reduced weight and faster charging. 

The EIB’s goal is to finance an equitable transition to a global net-zero economy, both in Europe and the world.

Johan Ekdahl, CFO of Volvo Cars says, “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,” adds Ekdahl.

Brief about Volvo Car Corporation

Volvo Car Corporation, established in 1927, has been publicly listed on the Nasdaq Stockholm since 2021. The group includes Volvo Cars, Zenseact, and Volvo On Demand, with strategic stakes in Polestar (48.3 per cent) and LYNK & CO (30 per cent). 

Collaborating with ECARX, Volvo owns HaleyTek for Android Automotive-based infotainment platforms. Additionally, the joint venture NOVO Energy, with Northvolt (50 per cent), focuses on sustainable lithium-ion batteries for electric Volvo and Polestar cars.

What does EIB offer?

The European Investment Bank (EIB), an EU financing institution collectively owned by member states, aims to ensure a “just transition for all” as part of its Climate Bank Roadmap 2025.

With a goal to support €1T in climate action and environmental sustainability investments by 2030, the EIB is committed to aligning all new operations with the goals of the Paris Agreement.