BMW has signed a €2 billion ($2.3 billion) supply deal with Swedish battery manufacturer Northvolt.
As part of the deal, Northvolt will manufacture the battery cells required by BMW using renewable electricity at a new plant in northern Sweden. The first battery cells will be delivered in 2024.
In a statement, BMW confirmed that 100 per cent of the energy needed to produce the battery cells will come from wind and hydroelectric power. Additionally, the cobalt and lithium needed will be sourced from mines that fulfil the high sustainability standards of both BMW and Northvolt.
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Northvolt becomes BMW’s third major supplier of battery cells, joining South Korea’s Samsung SDI and China’s Contemporary Amperex Technology. Northvolt was founded in 2016 by two former Tesla executives and BMW first entered a cooperation with the company to develop battery cells back in mid-2018.
“Signing this contract is another step towards meeting our growing need for battery cells in the long term,” member of the Board of Management of BMW AG responsible for Purchasing and Supplier Network, Andreas Wendt, said in a statement. “We are systematically driving electrification of our vehicle fleet. By 2023, we aim to have 25 electrified models on the roads – more than half of them fully-electric.”
Northvolt raised $1 billion last year from investments that included BMW, Goldman Sachs and the Volkswagen Group to build its battery-cell factory in northern Sweden, while the news of this battery supply deal come just a few days after the all-electric BMW iX3 was unveiled.
