BMW has reportedly canceled a two billion euro order for battery cells with Swedish company Northvolt, citing delays and quality concerns. The order, which was signed in July 2020 and was supposed to be delivered this year, has been withdrawn by BMW due to Northvolt being behind schedule in its production.
According to German publication Manager Magazin, Northvolt informed its investors of the cancellation at the end of May. The decision was reportedly driven by two main factors. Firstly, the quality of the cells supplied by Northvolt did not meet BMW’s expectations. Secondly, Northvolt’s production capacity is currently limited to its factory in Sweden, which has been operational since 2022. The company is still in the planning stages for its other plants, making it unable to meet BMW’s current demand.
See also: Northvolt Begins Construction of Battery Cell Factory in Germany
BMW’s decision is particularly crucial as it needs the prismatic cells supplied by Northvolt for its current models, such as the i4, i7, and iX. However, BMW’s future electric vehicles will be based on the Neue Klasse platform, which will use cylindrical cells from other suppliers like CATL, Eve Energy, and Envision.
Despite canceling the order, BMW intends to maintain its partnership with Northvolt. “We will continue to rely on Northvolt,” stated BMW, indicating a commitment to future collaboration. Northvolt also expressed a similar sentiment, saying that BMW will remain a partner.
Northvolt is facing production challenges, with its factory in Skellefteå almost two years behind schedule. The company is struggling to reduce production waste, leading to lower production volumes and increased costs. However, Northvolt’s other customers, such as Scania and the VW Group, are also facing similar challenges.
BMW’s cancellation of the order is seen as a setback for Northvolt, but the company remains optimistic about its future prospects. The Swedish company is expected to complement the three known battery suppliers for the Neue Klasse platform, starting in 2028. Despite the setback, Northvolt’s partnership with BMW and other major automakers remains intact, highlighting the importance of collaboration in the rapidly evolving electric vehicle market.
