The battery bubble is starting to burst: the Northvolt and BMW agreement is off
BMW has canceled a 2 billion euro ($2.15 billion) order of EV battery cells from Swedish manufacturer Northvolt, four years after the deal was announced.
In July 2020, BMW signed a supply agreement with Northvolt and expected to receive the first battery cells this year. However, Northvolt has been unable to fulfill its obligations, as it is struggling with the industrialization of production. The Swedish company is reportedly two years behind schedule and producing too many faulty battery packs.
The cells supplied by Northvolt were to be produced using 100% renewable energy from wind and hydropower. Handelsblatt reports that BMW recently canceled the order and will turn to Samsung SDI to supply the battery cells it needs for its current EVs. Interestingly, BMW still has a contract with Northvolt to supply its Neue Klasse-based EVs with next-generation battery cells, but they aren't there yet.
“Northvolt and the BMW Group have jointly decided to focus Northvolt's activities on the goal of developing next-generation battery cells,” a BMW spokesperson said. “The BMW Group continues to have a strong interest in establishing a high-performance, circular and sustainable battery cell manufacturer in Europe.” These words are nothing more than an attempt to hide behind kind words the failure of a policy that has focused everything on battery electric cars, without the technology being ready and the market wanting the product.
The cause of the cancellation would be delays
Northvolt was founded in 2016 by two former Tesla executives and in January raised $5 billion to expand its Swedish facility to allow it to recycle batteries. In March, the company also opened a new battery gigafactory in Heide, Germany, and is evaluating a new factory in Borlange, Sweden.
BMW's Neue Klasse electric vehicle range will launch with a production version of the iX3 in late 2025. This model will be followed by an electric sedan of similar size to the current 3 Series. Other Neue Klasse models include a coupe-style sedan called the iX4 and a station wagon scheduled for launch in 2027. The replacement for the current iX2 will also be part of the Neue Klasse family.
The fact remains that a NewCo based solely on the hope of electric success has raised five billion euros. Perhaps the best definition of “Malinvestment” possible. Now the electric bubbles are ripe and starting to pop. Who will pay the bill?
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The article The battery bubble begins to burst: the Northvolt and BMW agreement fails comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/inizia-a-scoppiare-la-bolla-delle-batterie-salta-laccordo-northvolt-e-bmw/ on Sat, 22 Jun 2024 18:13:16 +0000.