Volvo is going electric. So is every other automaker. Compliance vehicles have morphed into huge initiatives, bold promises, and enormous investments. Volvo going electric isn't surprising or novel, but as a relatively small player in the automotive world, it's interesting to see Volvo following the lead of the biggest EV makers on the planet.

Currently, the battery packs in Volvo's hybrids are custom-built by LG Chem. The company is one of the main suppliers for a large number of automakers, including Tesla. But beginning with the companys first EV, the XC40 Recharge, its taking control of the hardware and software thatll power its small electric SUV.

"Starting with [battery-electric vehicles], it's a whole different ball game. The pack becomes part of the vehicle structure," said Ulrik Persson, Volvo's battery product manager. "We felt it was a strategic decision to take ownership of the component."

The battery pack is the most expensive component of an EV. For an automaker that has built its reputation on safety, being able to integrate it in-house without relying on a third party is paramount. The XC40 started as a gas-powered vehicle, and the company had to make major changes to make it as safe as a Volvo should be. That includes re-creating some of the space in the engine bay occupied by the now-gone engine with metal framing poking out from the EV equipment that resides there now.

Going forward, electrification will become a larger part of the company's offerings, with a goal to make 50 percent of its global sales be battery-electric vehicles by 2025. To accomplish that, it needs to appeal to drivers who have become accustomed to Tesla's ability to do constant over-the-air updates that, in some cases, extend their cars' range.

To achieve that, it's taking a page out of Tesla's book and working on its own battery algorithm. Like Tesla, it'll use data shared by customers driving their cars; based on that, the automaker will tweak its software to make its vehicles more efficient and then send that updated software out to electrified Volvos.

Gone are the days when a vehicle remained static after leaving the lot. Tesla changed what people expect from their vehicles, and to compete with them in the electric world, automakers like Volvo need to adapt. Its not cheap, though.

The automaker invested $60 million on battery lab at its Gothenburg, Sweden, headquarters. Here Volvo puts its packs and modules through rigorous testing. The first portion is complete at a price of $25 million, with the second area currently under construction. And there's available room for a third if it's needed.

In the lab, Volvo engineers are putting types of batteries through the paces. It sources two different battery types for its vehicles. For the China market, CATL supplies the automaker with cylindrical cells like the ones found in Teslas, while LG Chem supplies pouches for the rest of the markets.

It's an undertaking that should work well in Europe, where EV sales are growing. It might be a tough sell in the United States, however, where electric vehicles still make up a minuscule part of total sales. Some of that probably has to do with range anxiety. Sure, we dont drive 200 miles per day on average, but Americans still want to be able to accomplish that feat as easily in an EV as in a gas vehicle.

Tesla's claims to superior range is one reason its cars are a popular choice for many looking to make the switch. Volvo wants to re-create that phenomenon. Like everyone else in the market, it's behind the house that Elon built. But it's laying a good foundation as it makes its way into the neighborhood.

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Volvo Follows Tesla's Lead on EVs by Building Its Own Batteries - Car and Driver