Published on June 26th, 2024 | by Sounder Rajen

BMW Cancels Battery Contract With Northvolt, Who Will Be The New Supplier?

Since the previous contract cost upwards of USD2 billion, how much will it cost now?

German luxury car manufacturer BMW announced not very long ago that it has terminated a substantial €2 billion (USD2.15 billion) order for battery cells intended for its electric vehicle (EV) lineup with Northvolt, a prominent Swedish battery manufacturer.

This decision follows reports from German media outlets, such as manager magazin, which suggested that Northvolt was unable to meet the agreed-upon delivery timelines specified in a long-term supply contract initially inked in 2020.

Moreover, in an official statement, BMW clarified the rationale behind this move, citing mutual agreement with Northvolt to redirect the latter’s efforts towards the development of next-generation battery cell technologies.

BMW emphasised its ongoing commitment to fostering the emergence of a robust, high-performance manufacturer capable of producing circular and sustainable battery cells within Europe and a company spokesperson stated, “The BMW Group continues to maintain a keen interest in the establishment of a cutting-edge facility dedicated to the production of environmentally friendly battery cells.”

On top of that, Northvolt, at the time of the announcement, had not responded to requests to respond regarding the cancellation of the order by BMW. The decision by BMW underscores the complexities and challenges involved in securing a stable supply chain for critical components in the rapidly evolving EV sector.

The cancellation of the contract with Northvolt, valued at a significant €2 billion, reflects BMW’s strategic pivot towards prioritising advancements in battery technology, which are deemed pivotal for the future competitiveness of its electric vehicle offerings.

This development also highlights BMW’s strategic foresight in anticipating the evolving demands of the EV market, where advancements in battery technology play a pivotal role in enhancing performance, range, and sustainability metrics. By focusing on next-generation battery cell development, the brand aims to contribute to achieving sustainable mobility.

As the automotive industry continues its shift towards electrification, securing a robust and sustainable supply chain for battery cells remains a paramount concern for manufacturers like BMW. The company’s decision to reevaluate its partnership with Northvolt underscores the critical importance of reliability and technological advancement in the future of electric mobility.