Volvo plant in Chengdu now runs entirely on renewable energy

Volvo Cars’ factory in Chengdu – the largest factory in China from the Swedish manufacturer – now runs entirely on renewable energy. This has increased the share of renewable energy use in the company’s global production network to 80 percent.

Volvo Cars Chengdu car plant

The move to 100 percent renewable energy in Chengdu has been accomplished through the conclusion of a new energy contract, which will reduce the plant’s CO 2 emissions by more than 11,000 tons per year. It is the most recent step towards realizing Volvo’s ambition to be completely climate-neutral by 2025 in terms of production.


The switch to the new energy contract is part of a broader climate plan that aims to reduce the overall carbon footprint per car by 40 percent between 2018 and 2025. Volvo aims to be a carbon neutral company by 2040.

The new energy contract is also in line with China’s ambitions to reduce CO2 emissions from industry and reduce footprint due to power generation. Until recently, Volvo’s Chengdu plant used 70 percent electricity from renewable sources. The new contract covers the last 30 percent.

Large part of hydropower

Under the new contract, approximately 65 percent of the energy supplied to the factory comes from hydropower and the rest from solar, wind and other renewable sources.

Hydropower station dam in Chengdu

“Our ambition is to reduce our ecological footprint through concrete, tangible measures,” said Javier Varela, Head of Industrial Operations and Quality. “The fact that we have secured a fully sustainable energy supply for our largest factory in China is an important milestone. It underlines our commitment to taking concrete, meaningful measures.”

Volvo is continuously working to reduce the ecological footprint of the production network and has reached a number of milestones in recent years. All European plants have had renewable energy supplies since 2008, while the engine plant in Skövde, Sweden, was the first plant in the company’s network to become completely carbon-neutral in 2018.

Volvo installed no fewer than 15,000 solar panels in its factory in Ghent, Belgium in 2018: the first large-scale application of solar energy in the brand’s global production network.


These and other measures are part of the climate plan launched by Volvo in late 2019, one of the most ambitious in the automotive industry. The main goal of this plan is that by 2025, half of all Volvo sales will be powered by battery. The other half must consist of electrified hybrid models (Mild hybrid and Plug-in hybrid). Volvo will introduce a fully electric model every year for the next five years.

Volvo Cars Chengdu car plant

Volvo’s action plan goes beyond addressing exhaust emissions through full electrification. Volvo also aims to address carbon emissions across the company’s broader business, supply chain and through the recycling and reuse of materials.

Author: Nabeel K
Email: nabeel@wheelsjoint.com



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