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BMW AG signed a deal with Goldman Sachs Group Inc.-backed Northvolt AB for 2 billion euros ($2.3 billion) of battery cells to power the German company’s electric cars.
Northvolt, a Swedish firm started by two former Tesla Inc. executives, will manufacture the cells using renewable electricity and deliver them from 2024 as part of a long-term contract, BMW said in a statement Thursday.
Local access to batteries is becoming key for automakers trying to become less dependent on dominant suppliers in Asia. Northvolt will become BMW’s third major supplier for the technology, along with China’s Contemporary Amperex Technology Co. Ltd. and South Korea’s Samsung SDI Co.
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The deal is also meant to aid BMW’s push into electric cars. The Munich-based manufacturer plans to introduce five new battery-powered vehicles through next year, and offer more than 12 electric models by 2023.
Northvolt raised $1 billion last year from investors including Volkswagen AG, Goldman Sachs and BMW to build a battery-cell factory in northern Sweden. VW plans to spend about 1.35 billion euros to erect a joint factory with the supplier in Salzgitter, Germany.