BMW not investing in new Northvolt funding round

MUNICH: BMW AG is unwilling to invest more in Northvolt AB, the cash-strapped battery maker that’s seeking fresh funds to stabilize its finances, according to a person familiar with the matter.

The German automaker sat out recent Northvolt financing rounds and isn’t prepared to participate in the next one, the person said, asking not to be named discussing internal information.

BMW currently owns 2.8% of the Swedish electric-vehicle supplier.

Northvolt is in the process of raising money as it faces a liquidity crisis.

Company officials including CEO Peter Carlsson and co-founder Harald Mix have pledged to provide fresh capital to keep Northvolt afloat.

BMW declined to comment. A Northvolt spokesman 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 balked 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 canceled a €2 billion ($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 AB and Volkswagen AG 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% stake at the end of 2023, has said it remains a supporter of Northvolt’s industrial ramp-up but hasn’t said whether it will provide more funds.