Vehicle OEM BMW Group has signed a long-term supply contract worth €2 billion ($2.3 billion) to secure lithium-ion battery cells from the Swedish company Northvolt.
The battery cells will be produced at Northvolt’s planned gigafactory in Skellefteå in northern Sweden (series plant Northvolt Ett) when the plant is completed from 2024.
Northvolt will obtain 100% of the energy needed to produce the battery cells in northern Sweden and exclusively from wind and hydroelectric power.
The contract stipulates Northvolt will only use green power to produce the fifth-generation battery cells.
Oliver Zipse, chairman of the board of management of BMW, said: “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.”
Northvolt is the third battery cell supplier we have partnered with, alongside our existing partners, CATL and Samsung SDI.
The BMW Group will source cells manufactured in Europe from the Chinese manufacturer CATL – from the plant currently under construction in Erfurt, Germany.
Last year, Northvolt revealed it would build a second battery manufacturing facility in Germany in partnership with Volkswagen.
Northvolt’s equity capital raise for the plant at Skellefteå was led by VW and Goldman Sachs Merchant Banking Division, alongside BMW, AMF, Folksam Group and IMAS Foundation.