The German automaker BMW has canceled a €2 billion order for battery cells with the Swedish supplier Northvolt. “Northvolt and the BMW Group have jointly decided to focus Northvolt’s activities on developing next-generation battery cells,” a BMW spokesperson confirmed on Thursday, following a report by “Manager Magazin.”
The magazine cited issues at Northvolt, which was founded in 2016, related to scaling up industrial mass production. Northvolt is reportedly two years behind schedule and producing too much scrap material.
BMW did not comment on the specific reasons for the order cancellation. However, the spokesperson emphasized that BMW remains “strongly interested in establishing a high-performance manufacturer of circular and sustainable battery cells in Europe.”
Northvolt plans to produce battery cells for electric vehicles in Schleswig-Holstein starting in 2026. In March, German Chancellor Olaf Scholz and Economic and Climate Minister Robert Habeck attended the groundbreaking ceremony for the “Gigafactory” in Heide.
BMW had ordered Northvolt battery cells for the current fifth generation of its batteries. Production was scheduled to begin in 2024 at Northvolt’s factory in Skellefteå, northern Sweden, with energy sourced “100 percent from wind and hydropower,” as both companies highlighted when they signed the contract in July 2020. Now, the gap is expected to be filled primarily by the Korean supplier Samsung SDI. However, Northvolt is still expected to supply the next-generation battery cells that BMW needs for its “New Class” electric vehicles.