German carmaker BMW has withdrawn an order for battery cells worth €2 billion ($2.2 billion) from the Swedish supplier Northvolt.
"Northvolt and the BMW Group have jointly decided to focus Northvolt's activities on the goal of developing next-generation battery cells," said a BMW spokesman on Thursday, confirming a report by Manager magazine.
The magazine cited problems at the battery cell supplier in ramping up industrial series production as the reason for the cancellation. Northvolt, which was founded in 2016, is reportedly two years behind schedule and facing quality issues in its manufacturing.
BMW declined to comment on the reasons for the order cancellation. The spokesman said the carmaker is "still very interested in establishing a high-performance manufacturer of circular and sustainable battery cells in Europe."
Northvolt is currently constructing a factory in the northern German state of Schleswig-Holstein, where the company plans to build battery cells for electric cars beginning in 2026.
German Chancellor Olaf Scholz and Vice-Chancellor Robert Habeck attended the plant's ground-breaking ceremony in March.
BMW had ordered the Northvolt cells for its current fifth generation of batteries, which were to be manufactured at the Northvolt factory in Skellefteå in northern Sweden from 2024, with energy "100% from wind and hydropower," as both companies emphasized when the contract was signed in July 2020.
Now the South Korean supplier Samsung SDI is set to fill the gap.
However, the next-generation battery cells that BMW needs for its "New Class" e-cars are still to come from Northvolt.
