The BMW Group has signed a long-term battery cell supply contract worth 2 billion euros with Swedish supplier Northvolt. The cells will be produced beginning in 2024 at the Northvolt Ett gigafactory, which is currently under construction in Skellefteå in northern Sweden.
Northvolt Ett in Sweden is to go on line in 2021 with an initial capacity of 32 GWh, which is expected to expand to 40 GWh by 2024. Northvolt CEO Peter Carlsson said last November that the company hopes to be producing 150 GWh worth of cells in Europe by 2030.
BMW has been working with Northvolt since 2018—the carmaker also buys cells from CATL and Samsung SDI as part of a deliberate strategy to encourage global competition. Andreas Wendt, the head of BMW’s Purchasing and Supplier Network, says the multi-supplier policy ensures that the automaker always has access to the best possible cell technology.
BMW is determined to keep its battery supply chain as green as possible. The Northvolt Ett plant will be powered entirely by renewable energy, and will have in-house recycling capacities. Northvolt aims to use 50 percent recycled material in new cells by 2030. CATL and Samsung SDI have also pledged to power cell production with renewable energy.
Last October, BMW announced that it would start buying cobalt and lithium directly from mine operators—the idea is to eliminate suppliers and go-betweens from the supply chain, allowing greater control and greater transparency. BMW’s new PartChain supply chain management system uses blockchain technology to provide transparency and traceability of its components and raw materials.
“To make an effective contribution to climate protection, we aim to improve our products’ overall environmental balance—from resources to recycling,” said BMW Board Chairman Oliver Zipse. “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.”