BMW, Northvolt sign 2B Euro battery deal
Swedish battery maker's green power source sealed contract Metal Tech News Weekly Edition – July 22, 2020
Last updated 7/10/2022 at 2:43pm
In what has been series of moves toward expanding its electric vehicle lineup, BMW Group has signed a 2 billion euro (US$2.28 billion) long-term supply contract with Northvolt, a Swedish manufacturer with a mission to build the greenest rechargeable batteries in the world.
Northvolt's commitment to sourcing 100% of the energy it needs to produce battery cells from wind and hydroelectric power generated in northern Sweden was a deciding factor for BMW as it looked for new companies to supply batteries for its growing line of electric vehicles.
"To make an effective contribution to climate protection, we aim to improve our products' overall environmental balance – from resources to recycling," BMW Chairman Oliver Zipse said on July 16. "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."
The BMW chairman said that Northvolt's use of renewable energy could reduce annual carbon dioxide emissions by roughly 10 million metric tons, or about the output of a city the size of Munich, once battery productions reaches the rate the companies foresee for the next decade.
Just two days before the Northvolt announcement, BMW debuted its iX3, a fully electric sports utility vehicle that provides drivers with an emission-free option for enjoying the comfort, multi‑faceted functionality, and spaciousness of the BMW X3.
More information on the world premiere of the BMW iX3 can be read at BMW adds SUV to electric vehicle lineup in the July 15 edition of Metal Tech News.
BMW has two more fully electric models coming out over the next year and aims to have 25 electrified models by 2023, more than half of which will be fully electric. This means the German automaker will need a lot of batteries in the coming years.
"Northvolt is the third battery cell supplier we have partnered with, alongside our existing partners, CATL and Samsung SDI. Signing this contract is another step towards meeting our growing need for battery cells in the long term," said Andreas Wendt, member of the BMW Board of Management responsible for purchasing and supplier network.
BMW Group is awarding its battery contracts based on a global competition that takes into consideration both the technology and a business attributes of the supplier.
"This ensures we always have access to the best possible cell technology," Wendt said.
When it comes to the electric vehicle supply chain, BMW Group is going beyond the battery supplier to the mines that supply the raw materials going into the cells.
Earlier this month, the German automaker announced it had cut a 100 million euro (US$114 million) deal with Managem Group, a Moroccan mining company, to supply responsibly mined cobalt for batteries going into its electric cars. And, at the beginning of 2020, signed a deal to acquire 540 million euros (US$615 million) worth of lithium from Australian miners, enough to supply BMW's lithium needs for the next five years.
Northvolt is also looking into sustainable battery material sources. Earlier this year, the company signed a joint venture agreement with Hydro, a Norwegian aluminum company, to establish a recycling hub in Norway, one of the most advanced electric vehicle markets in the world.
Hydro Volt, the JV company, plans to begin aluminum and battery metal recycling operation in 2021 and Northvolt is targeting 50% of its raw battery materials coming from recycling by 2030.
BMW Group and Northvolt said they will commonly source the cobalt and lithium needs, which will provide assurances that the raw materials going into the batteries are sourced from mining companies that prioritize environmental standards, respect for human rights, and reducing the carbon footprint.
"Sustainability is an important aspect of our corporate strategy and plays a key role in expanding electromobility," said Wendt.