As it ramps up electric-car production, BMW has inked a battery-supply deal with Sweden’s Northvolt.
BMW plans to buy 2 billion euros ($2.3 billion) of batteries from Northvolt beginning in 2024. Batteries will be manufactured at a factory currently under construction Skelleftea, Sweden, which will use 100% renewable energy, according to a BMW press release.
Northvolt is also building a battery factory in Salzgitter, Germany, as part of a partnership with the Volkswagen Group announced in May. That factory is also scheduled to start producing batteries in 2024.
The new deal will make Northvolt BMW’s third primary global supplier for cells, after longtime supplier Samsung SDI of South Korea, and China’s CATL. Both of those suppliers already have factories in Europe.
BMW iNext Pilot Plant
But BMW’s deal with Northvolt underscores a reality—that there has been pressure on German automakers to secure the supply chain by having a secured battery supply from a company headquartered in the European Union.
BMW plans to launch 12 all-electric models by 2025. While the first of these new models—the iX3 crossover—will be built in Shenyang, China, the following two models, due in 2021, will be built in Germany. the iNext crossover will be built in Dingolfing, while the i4 sedan will be built in Munich.
Although BMW and the VW Group are turning to a series of cell suppliers and negotiating directly with them, Mercedes-Benz has a different strategy for maintaining control. It will establish a “global network” of nine battery factories at seven locations in Europe, North America, and Asia, primarily managed by battery-making subsidiary Deutsche Accumotive.