BMW has reportedly cancelled a 2 billion euro (A$3.2 billion) order for battery cells for its electric vehicles (EVs) with Swedish battery supplier Northvolt, following delays in the latter fulfilling the carmaker’s orders.
Reuters reports the Swedish company could not deliver on time on a long-term supply contract for battery cells, which was signed in 2020.
The battery cells were to be produced from the start of this year at the Northvolt Ett gigafactory – located in Skellefteå, approximately nine hours north of Stockholm.
Northvolt is Volvo’s battery supplier, and it was last year reported the company had secured more than A$79.64 billion worth of contracts from companies including BMW, Volkswagen, and Polestar.
BMW Group and Northvolt have been partners since 2018, when the two companies began a joint operation to develop battery cells. The partnership was also underpinned by BMW Group’s “financial participation” in Northvolt, according to a media release from 2020.
BMW told Reuters “Northvolt and BMW Group have jointly decided to focus Northvolt’s activities on the goal of developing next-generation battery cells”.
“The BMW Group continues to have a strong interest in establishing a high-performance manufacturer of circular and sustainable battery cells in Europe.”
Northvolt did not immediately respond to the news agency’s request for comment.
Founded in 2016, Northvolt claims its primary mission is to build the world’s greenest battery.
In November 2021, it produced its first battery cell with 100 per cent recycled nickel, manganese and cobalt, with plans to have 50 per cent of all its raw materials come from recycled batteries by 2030.
As part of the manufacturer deals, Volkswagen alone placed a A$20.27 billion battery cell order with Northvolt in 2021.
In 2022, Northvolt announced it would build a battery manufacturing plant in Gothenburg, Sweden, as part of a joint venture with Volvo Cars. It’s set to start operations next year.
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