BMW has pulled out of a substantial €2 billion contract with Northvolt, citing significant delays and quality issues in the Swedish battery supplier’s production process. This decision marks a major setback for Northvolt, which is now losing a key client and substantial revenue.
According to a BMW spokesperson, both companies have decided to focus Northvolt's efforts on developing next-generation battery cells. The order, originally placed by BMW four years ago, has been canceled because Northvolt is reportedly two years behind schedule and struggling with excessive production waste, as reported by "Manager Magazin."
The challenges faced by Northvolt, which was founded in 2016, have been compounded by their inability to meet the expected quality standards. Furthermore, the BMW models for which the cells were intended are set to be replaced by new-generation electric vehicles in the near future.
Despite this setback, Northvolt continues its ambitious plans to produce battery cells for electric vehicles in Schleswig-Holstein starting in 2026. The groundbreaking ceremony for this "Gigafactory," attended by Chancellor Olaf Scholz and Economics and Climate Minister Robert Habeck, highlighted the project's importance for Europe’s green energy future.
Initially, the Northvolt cells were intended for BMW's fifth-generation batteries, with production set to begin in 2024 at Northvolt's factory in Skellefteå, northern Sweden, using renewable energy sources. To fill the gap left by Northvolt, BMW is turning to other suppliers, particularly Samsung SDI, while still planning to use Northvolt for the next generation of battery cells for its "New Class" electric vehicles.
