When Northvolt's first factory, Northvolt Ett in Skellefteå, Sweden, is ready to churn out 32 GWh in annual energy storage units, there will be plenty of pressure on its production capacity.

The Swedish battery manufacturer has just entered a long-term agreement with the BMW Group worth EUR 2 billion.

BMW says Northvolt's  focus on battery recycling and renewable power played a decisive role in the decision.

"To make an effective contribution to climate protection, we aim to improve our products’ overall environmental balance – from resources to recycling. 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," writes BMW Chair Oliver Zipse in a press release.

Electric cars currently comprise only a small portion of BMW's product portfolio and count only a handful of models, but the automotive group forecasts that the number of electric and hybrid BMW types will have increased to 25 in 2023, and half of these will run solely on electricity.

The relationship between Northvolt and BMW dates back to the Swedish firm's infancy in 2018, when the former entered a partnership with the carmaker on battery development. BMW also invested roughly EUR 60 million in Northvolt last autumn.

"Naturally, it's really fun to have a partner with such extensive competencies and deep technical understanding. At the same time, it's now clear what is needed to advance this from a development project toward a battery that functions in their electric cars. There will be a lot of summer and winter testing," Northvolt Chief Executive Peter Carlsson tells Swedish financial news agency Nyhetsbyrån Direkt.

Northvolt has set a target to source half the content for its new batteries from recycled material. At the moment, Northvolt has plans to build a recycling station near Northvolt Ett, just as the company has settled an agreement with Norwegian aluminum producer Norsk Hydro that will manifest in the form of repurposing the so-called black mass, or the chemical components of batteries, as well as aluminum.

Three months back, Northvolt reported its order book to have a value of around EUR 11 billion ahead of 2030.

English Edit: Daniel Frank Christensen

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