BMW has announced the cancellation of a 2 billion euros agreement with Swedish supplier Northvolt for electric vehicle battery cells, citing the latter’s production scalability issues.
Northvolt is reportedly facing delays of up to two years in deliveries and quality concerns that the German manufacturer finds unacceptable.
Despite this setback, BMW remains interested in partnering with a high-performance, sustainable battery cell manufacturer in Europe, emphasizing the importance of local supply chain production for its new mobility vehicles.
The initial information suggested that the company had ordered fifth-generation battery cells from Northvolt, which are being produced with “100 per cent wind and hydroelectric power.”
Meanwhile, Germany’s request for the Swedish firm to build a new gigafactory on German soil, particularly in the north of the country, to attract green investments to Europe, comes just weeks after the deal’s collapse.
Economy Minister Robert Habeck urged the Scandinavian industry to establish a complex similar to the plant under construction in Heide, in the northeastern state of Mecklenburg-Vorpommern, valued at 5 billion dollars.
The Heide center is expected to start operating in 2026 and will have a maximum capacity of 60 GWh, enough to produce approximately 1 million electric cars.
“In eastern Germany, many significant investments are being made,” the politician states.
He adds, “The new semiconductor facilities are almost exclusively located in the east, with Intel, TSMC, Infineon, GlobalFoundries, and the clusters forming around them, leading to the creation of more networks.”
