BMW is unwilling to invest more in Northvolt, the cash-strapped battery maker that’s seeking fresh funds to stabilise its finances, according to a source familiar with the matter.
The German automaker sat out recent Northvolt financing rounds and is not prepared to participate in the next one, the source said, asking not to be named discussing internal information. BMW currently owns 2.8 per cent of the Swedish electric vehicle (EV) supplier.
Northvolt is in the process of raising money as it faces a liquidity crisis. Company officials including chief executive officer Peter Carlsson and co-founder Harald Mix have pledged to provide fresh capital to keep Northvolt afloat.
BMW declined to comment. A Northvolt spokesperson said the company continues to work on financing and declined further comment.
Northvolt slid into peril after a production ramp-up fell behind schedule at its main plant near the Arctic Circle in Sweden, and lenders baulked at providing access to credit lines. The squeeze has forced the company to cut jobs, pause its expansion in Europe and North America, and focus on raising output at the facility in Skelleftea.
The company represents Europe’s highest-profile effort to stand up a local supply chain for EV batteries, but is competing with lower-cost Chinese producers.
BMW earlier this year cancelled a two billion euros (S$2.2 billion) order for Northvolt batteries, saying it would instead work with the company to develop next-generation cells for its future EVs.
Automakers including Volvo Car and Volkswagen have walked back their electrification plans amid waning demand for electric cars in Europe. Volvo Car has a joint venture with Northvolt and Volkswagen is the battery maker’s biggest shareholder.
Volkswagen, with about a 21 per cent stake at the end of 2023, has said it remains a supporter of Northvolt’s industrial ramp-up but has not said whether it will provide more funds. BLOOMBERG
