By Dominic Chopping

STOCKHOLM--Swedish truck maker Scania said Tuesday that it plans to invest more than 1 billion Swedish kronor ($115.5 million) in a battery assembly plant in Sodertalje, outside of Stockholm.

Scania, owned by Volkswagen AG subsidiary Traton SE, said construction will start in early 2021 with an aim to be fully operational by 2023.

The assembly plant will be built adjacent to its existing chassis assembly plant and will assemble battery modules and packs from cells which will be delivered from Northvolt's battery factory in Skelleftea, Sweden. It will employ around 200 people, mostly recruited from within the company.

"This is a tangible manifestation of our determination to take a leading role in heavy vehicle electrification... Operating an on-site battery assembly plant is a prerequisite for large-scale production of electric vehicles," said Ruthger de Vries, head of production and logistics at Scania.

Scania said separately it will invest 15.5 million euros ($18.4 million) in a new battery testing laboratory at its research and development facilities in Sodertalje. The laboratory will be fully operational by autumn 2021.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

11-17-20 0440ET