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BMW Group enters long-term €2B supply contract with Northvolt for battery cells from Europe

The BMW Group has signed a long-term supply contract worth €2 billion for battery cells with the Swedish company Northvolt. The battery cells will be produced in Europe at the Northvolt gigafactory currently under construction in Skellefteå in northern Sweden (series plant Northvolt Ett) from 2024.

Northvolt will obtain 100% of the energy needed to produce the battery cells regionally in northern Sweden and exclusively from wind and hydroelectric power.

To make an effective contribution to climate protection, we aim to improve our products’ overall environmental balance—from resources to recycling. This applies in particular to energy-intensive production of high-voltage batteries for electric vehicles. That is why we now have a contractual agreement with our cell manufacturers that they will only use green power to produce our fifth-generation battery cells.

—Oliver Zipse, Chairman of the Board of Management of BMW AG

Northvolt is the third battery cell supplier we have partnered with, alongside our existing partners, CATL and Samsung SDI. Signing this contract is another step towards meeting our growing need for battery cells in the long term.

—Andreas Wendt, member of the Board of Management of BMW AG responsible for Purchasing and Supplier Network

The BMW Group will also source cells manufactured in Europe from the Chinese manufacturer CATL from the plant currently under construction in Erfurt, Germany. Every cell generation at the BMW Group is awarded in global competition to the leading manufacturer from both a technology and a business perspective to ensure access to the best possible cell technology.

The BMW Group and Northvolt will commonly source the cobalt and lithium needed as key raw materials for cell production from mines that fulfil the sustainability standards of both companies. This ensures full transparency of the origin of raw materials at any time.

Sustainability is an important aspect of our corporate strategy and plays a key role in expanding electromobility.

—Andreas Wendt

The BMW Group will also no longer use rare earths in its fifth-generation electric drive trains from 2021 on.

The BMW Group and Northvolt are pursuing their goal of a sustainable value chain for battery cells in Europe through a joint technology consortium. Recyclable cell design is a consistent focus throughout the development of battery cells. Faced with rapidly growing demand for battery cells, recycling of battery components at the end of their lifecycle and extensive reuse of raw materials will be key to closing the materials loop in the best way possible.

The BMW Group recognised Northvolt’s potential and expertise early: In mid-2018, the BMW Group entered a cooperation to develop battery cells with the company formed in 2016. This was underpinned by the BMW Group’s financial participation in the firm. Both sides benefit from the partnership: The BMW Group contributes the battery expertise it has acquired over more than 15 years, while Northvolt has enabled itself for mass production with its gigafactory in northern Sweden.

The BMW Group operates its Battery Cell Competence Center in Munich. The aim of the competence center is to advance battery cell technology and introduce it into production processes. The production of battery cell prototypes makes it possible to analyze and fully understand cell value creation processes. The BMW Group produces batteries in-house at its plants in Dingolfing (Germany), Spartanburg (USA) and at the BBA plant in Shenyang (China). The BMW Group has also localized battery production in Thailand, where it is working with the Dräxlmaier Group.

The BMW Group will have 25 electrified models in its line-up by 2023. The basis for this is provided by flexible vehicle architectures for fully-electric vehicles, plug-in hybrids and models with combustion engines that allow the company to respond quickly to changing conditions. More than half of the 25 models will be fully electric.

The BMW Group will double its sales of electrified vehicles between 2019 and 2021, and the company expects to see a steep growth curve up to 2025, with global sales of electrified vehicles projected to increase by an average of more than 30% every year.

In Europe by 2021, electrified vehicles should make up a quarter of the BMW Group new vehicle fleet, a third in 2025 and half in 2030.


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