Esteemed European automaker BMW has cancelled a multi-billion dollar battery order from a Swedish company that has received billions in subsidies to build a plant in Canada.German media giant Handelsblatt reported this week that the Bavarian automaker cancelled a €2 billion (CAD$3 billion) order for lithium-ion battery cells from Northvolt because it could deliver on time on a long-term supply deal signed in 2020.That’s about the same amount the Swedish company received in subsidies from the governments of Canada and Quebec last September to build a battery plant near Montreal..Back across the Atlantic, deliveries were to start this year. Instead, BMW said it would source the parts from Korea’s Samsung.According to reports Northvolt is two years behind schedule ramping up production lines in Sweden because its factories produce too much industrial waste.In January, it announced a USD$5 billion recycling program to address the issue.It comes amid reports in Sweden that Northvolt is set to cancel a large new factory in Borlänge, Sweden. No reasons were given. But in March it broke ground on a so-called ‘gigafactory’ in Germany.The Borlänge site was announced in 2022. Northvolt agreed to buy an old paper mill and transform it into a plant to make active materials for the cathode (part of a battery cell) to be sent to other Northvolt sites for battery manufacturing..Though it has scaled back its EV plans, BMW said it will continue to work with Northvolt on developing next-generation power cells for cars.“The BMW Group continues to have a strong interest in establishing a high-performance manufacturer of circular and sustainable battery cells in Europe," it said.The irony is that BMW is a Northvolt shareholder and it’s cancelled order represented about 4% of its production backlog.Northvolt’s largest customer, however, is Volkswagen, which ordered $14 billion worth of batteries over 10 years in 2021. Neither company has disclosed how many have been produced or actually delivered.BMW is shifting to cylindrical battery cells for its ‘Neue Klasse’ (German for new class) EVs, claiming increases energy density and charging performance. The cars themselves will be built in Europe starting in 2025 and a factory in Mexico in 2027.
