BMW is betting billions on e-mobility – awards massive battery contracts

The original CATL order volume of four billion euros announced in mid-2018 will now be increased to EUR 7.3 billion (contract duration from 2020 to 2031), with EUR 4.5 billion for the BMW Group and EUR 2.8 billion for the Chinese production site of the BMW Brilliance Automotive Ltd. (BBA) joint venture in Shenyang. The BMW Group is the first customer of the CATL battery cell plant currently under construction in Erfurt, Germany. “We strongly supported and played an active part in establishing CATL in Germany,” says Dr. Andreas Wendt, member of the Board of Management of BMW AG responsible for Purchasing and Supplier Network, in a press release. The BMW Group has also signed a long-term supply contract for its fifth-generation electric drive trains with its second battery cell supplier, Samsung SDI. The contract, with value of EUR 2.9 billion, extends from 2021 to 2031. “In this way, we are securing our long-term battery cell needs. Every cell generation is awarded in global competition to the leading manufacturer from both a technology and a business perspective. This ensures we always have access to the best possible cell technology,” Wendt said at a supplier event today in Seoul, South Korea. The automotive giant says it will source the cobalt needed as a key raw material for cell production directly from mines in Australia and Morocco and make it available to CATL and Samsung SDI. The same applies to lithium, which the BMW Group will also source directly from mines, including from Australia. Extensive in-house expertise in battery cell technology The BMW Group sits on in-house expertise throughout the entire value chain for battery cell technology. In-house battery production takes place at the groups plants in Dingolfing (Germany) and Spartanburg (USA), and at the BBA plant in Shenyang (China). The BMW Group has also localised battery production in Thailand and is working with the Dräxlmaier Group in this area. On 14 November, the company opened its Battery Cell Competence Centre in Munich with the aim to advance battery cell technology and introduce it into production processes. The company invested a total of EUR 200 million in the location, which is set to create up to 200 jobs. “Whether we then produce the cells ourselves at a later date, will largely depend on how the supplier market develops,” Wendt says in the release. The BMW Group has also formed a joint technology consortium with Swedish battery manufacturer Northvolt and Umicore, a Belgian developer of battery materials, for the purpose of developing the cell technology crucial to electromobility. The cooperation will focus on creating a complete, sustainable value chain for battery cells in Europe, extending from development and production all the way to recycling.