Swedish carmaker Volvo Cars is opening its third European car plant, the first in nearly 60 years, to produce electric vehicles in Slovakia, Kallanish reports.

The facility in Kosice, eastern Slovakia, will have the capacity to manufacture 250,000 EVs per year. Construction is set to start next year, and series production of next-generation BEVs in 2026.

Volvo estimates an investment of €1.2 billion ($1.24 billion), of which around 20% will be funded by Slovak government support. The carmaker notes that the incentives were a “key factor” in the location decision, alongside good logistical and transport links to the rest of Europe, and access to a good supplier base.

The Kosice plant will strengthen Volvo’s manufacturing capabilities in its largest market, complementing production from Ghent in Belgium and Torslanda in Sweden – which together make 600,000 cars/year. It will also be the fifth car plant in Slovakia, enhancing the country’s automotive industry “in the new ecological era,” according to Slovak prime minister Eduard Heger.

“We have a clear focus on becoming a pure electric mobility brand by 2030,” says Volvo’s ceo Jim Rowan. “Expansion in Europe, our largest sales region, is crucial to our shift to electrification and continued growth.”

The facility will run on “climate neutral energy” and will be designed to be a leader in sustainable and efficient premium electric car production with an optimised layout and logistics flow. Volvo targets overall carbon neutrality by 2040, with manufacturing operations to achieve this status by 2025.