BMW nixes Northvolt battery deal

• BMW cancels deal with Swedish EV battery supplier worth $2 billion
• Northvolt, based in Sweden, still has deals with Volvo and Volkswagen Group
• BMW has shifted to more energy-dense cylindrical battery cells 

BMW has canceled a contract worth roughly $2 billion for EV battery cells from Swedish firm Northvolt, Reuters reported Thursday.

German media, including Manager magazine, initially reported that Northvolt could not deliver on time on a supply contract signed in 2020 and worth $2.3 billion at the time. That contract specified that Northvolt would begin making electric-car batteries for BMW in 2024.

BMW cylindrical battery cells

“Northvolt and the BMW Group have jointly decided to focus Northvolt’s activities on the goal of developing next-generation battery cells,” BMW said in a statement to Reuters. “The BMW Group continues to have a strong interest in establishing a high-performance manufacturer of circular and sustainable battery cells in Europe.”

BMW already contracts with Samsung SDI and CATL for batteries. Both Asian companies have factories in Europe, but the Northvolt deal would have given BMW a supplier that was also headquartered in Europe—a box German automakers have been pressured to check.

BMW Vision Neue Klasse X concept

BMW said in 2020 that batteries would be manufactured by Northvolt at a factory then under construction in Skelleftea, Sweden, using 100% renewable energy. Around the same time, Northvolt announced a German factory as part of a partnership with the Volkswagen Group. It also announced a joint-venture battery plant with Volvo in 2022 that’s expected to make cells for an electric Volvo XC60 SUV, and a Canadian plant in 2023.

BMW is shifting to cylindrical battery cells with its next-generation Neue Klasse (German for “new class”) EVs, claiming boosts to energy density and charging performance. The cars themselves will be assembled at two European sites starting in 2025, with production for the North American market at a Mexico factory following in 2027.