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Released July 03, 2024 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--German automaker BMW (Munich, Germany) has canceled a contract worth more than US$2 billion with Swedish battery cell maker Northvolt (Stockholm, Sweden).
In a statement, BMW said: "Northvolt and the 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." BMW's statement confirmed reports in Manager Magazine that revealed the canceled order. It also claimed that the decision was down to a two-year delay in Northvolt ramping up production and that the cells did not reach BMW's quality standards. BMW did not give reasons for the cancellation of the contract--one of the first major contracts for the plant--but it comes in the same week as media reports that Northvolt may be rethinking its plans for a new battery production plant in Borlange, in central Sweden.
In 2020, Industrial Info reported on the contract's signing, which would see Northvolt supply BMW with battery cells from the Northvolt Ett gigafactory in Skellefteå, in northern Sweden, which began production in 2022. It was also Europe's first, homegrown battery gigafactory. At the time of the deal, BMW had battery supply contracts with China's Contemporary Amperex Technology Company Limited (CATL) (Ningde, China) and South Korea's Samsung SDI (Yongin-si, South Korea). Following the contract's cancellation, Samsung SDI is expected to fill the gap for the moment. Northvolt Ett has an annual capacity of 16 gigawatt-hours (GWh)--enough to power 250,000 cars. The goal is to double that output to 32 GWh this year and to potentially expand to 60 GWh in the future.
In 2022, Northvolt announced plans to acquire a former paper mill in Borlange and convert it into a US$1 billion gigafactory--Northvolt Fem--capable of producing 100 GWh of cathode material per year to be sent to multiple Northvolt production sites. It was originally supposed to start operations this year and play a key role in helping the company fulfill more than US$50 billion worth of orders already secured. However, following reports in Swedish media that the project was being canceled, the company issued a statement admitting that it was reevaluating its options. "The discussion is still in progress, and we will provide additional comments once a decision has been reached."
To date, the Northvolt Ett plant in Sweden is the only fully operational gigafactory. The company is constructing two others, Northvolt Six in Canada and Northvolt Drei in Heide, northern Germany. Construction of the 5 billion-euro ($5.4 billion) Heide gigafactory plant got underway in April, with the help of a generous financial package from the government. It will have an annual potential production capacity of 60 GWh--enough for roughly 1 million EVs--and will employ more than 3,000 people when it starts operations in 2026. For additional information, see April 9, 2024, article - Northvolt Starts Work on German Battery Gigafactory.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
In a statement, BMW said: "Northvolt and the 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." BMW's statement confirmed reports in Manager Magazine that revealed the canceled order. It also claimed that the decision was down to a two-year delay in Northvolt ramping up production and that the cells did not reach BMW's quality standards. BMW did not give reasons for the cancellation of the contract--one of the first major contracts for the plant--but it comes in the same week as media reports that Northvolt may be rethinking its plans for a new battery production plant in Borlange, in central Sweden.
In 2020, Industrial Info reported on the contract's signing, which would see Northvolt supply BMW with battery cells from the Northvolt Ett gigafactory in Skellefteå, in northern Sweden, which began production in 2022. It was also Europe's first, homegrown battery gigafactory. At the time of the deal, BMW had battery supply contracts with China's Contemporary Amperex Technology Company Limited (CATL) (Ningde, China) and South Korea's Samsung SDI (Yongin-si, South Korea). Following the contract's cancellation, Samsung SDI is expected to fill the gap for the moment. Northvolt Ett has an annual capacity of 16 gigawatt-hours (GWh)--enough to power 250,000 cars. The goal is to double that output to 32 GWh this year and to potentially expand to 60 GWh in the future.
In 2022, Northvolt announced plans to acquire a former paper mill in Borlange and convert it into a US$1 billion gigafactory--Northvolt Fem--capable of producing 100 GWh of cathode material per year to be sent to multiple Northvolt production sites. It was originally supposed to start operations this year and play a key role in helping the company fulfill more than US$50 billion worth of orders already secured. However, following reports in Swedish media that the project was being canceled, the company issued a statement admitting that it was reevaluating its options. "The discussion is still in progress, and we will provide additional comments once a decision has been reached."
To date, the Northvolt Ett plant in Sweden is the only fully operational gigafactory. The company is constructing two others, Northvolt Six in Canada and Northvolt Drei in Heide, northern Germany. Construction of the 5 billion-euro ($5.4 billion) Heide gigafactory plant got underway in April, with the help of a generous financial package from the government. It will have an annual potential production capacity of 60 GWh--enough for roughly 1 million EVs--and will employ more than 3,000 people when it starts operations in 2026. For additional information, see April 9, 2024, article - Northvolt Starts Work on German Battery Gigafactory.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
