Volvo Cars said on Wednesday it plans to start assembling electric motors at its powertrain plant in Skovde, Sweden.
The automaker will begin making the component at the plant within the next few years. It will start complete production of the e-motor by the mid-2020s, a Volvo spokeswoman said. Full production will entail manufacturing the rotating parts of the e-motor and the housing for the electric drivetrain.
Volvo will invest invest 700 million crowns ($83 million) at the plant to add e-motor production.
The factory will supply e-motors to Volvo's vehicle assembly plants in Sweden and Belgium, a Volvo spokeswoman said, adding that it may also provide the component to the company's plants in the United States and China.
E-motors are a fundamental building block of electric cars, together with the battery and power electronics. Bringing the development and production of e-motors in-house will allow Volvo engineers to further optimize the component as well as the entire electric driveline in new models, the automaker said.
The decision comes after Volvo earlier this year said it would make big investments in design and development of e-motors for its next-generation models.
Volvo CEO Hakan Samuelsson said last week that he envisions the automaker becoming an electric-only brand within the next 10 years.
Volvo has previously stated that it wants half of its global sales to be full-electric models by 2025, with the rest to be hybrids.
The activities related to production of internal combustion engines at the Skovde plant will be transferred to a separate Volvo subsidiary, Powertrain Engineering Sweden.
Reuters contributed to this report.