BMW withdraws from Northvolt financing

The BMW Group is showing restraint in supporting the financially troubled battery manufacturer Northvolt AB, which is seeking new investors to stabilize its finances, according to confidential information. Despite currently holding a 2.8% stake, BMW did not participate in Northvolt's recent financing rounds and has no plans to engage in the next round. The German automaker is maintaining this decision closely while Northvolt intensively seeks fresh capital. Company executives such as CEO Peter Carlsson and co-founder Harald Mix have already committed to providing additional funds to keep Northvolt afloat. However, the company is deeply in crisis: delays in ramping up production at its main factory near the Arctic Circle in Sweden and lenders' refusal to grant credit lines have severely impacted Northvolt. Consequently, Northvolt was forced to cut jobs, pause its expansion in Europe and North America, and focus on increasing production in Skellefteå. This occurs against the backdrop of competition with lower-cost Chinese manufacturers for dominance in the EV battery production market in Europe. Earlier this year, BMW canceled an order of Northvolt batteries valued at two billion euros (2.2 billion USD) to concentrate more on developing the next generation of cells for future electric vehicles. In addition to BMW, other automakers like Volvo Car AB and Volkswagen AG have scaled back their electrification plans in Europe due to a decline in demand for electric vehicles. Volvo Car maintains a joint venture with Northvolt, while Volkswagen is the largest shareholder of the battery manufacturer. With a stake of about 21% at the end of 2023, Volkswagen remains a significant supporter of Northvolt but has not commented on further financial commitments.