BMW announced that it issued $10 billion in new battery cell contracts in order to secure supply for its upcoming electric cars.
After not launching any new all-electric vehicles in 7 years since the launch of the BMW i3, BMW is about to launch 3 new ones in the next two years.
The BMW iX3, an all-electric SUV, is due to go on sale next year and the BMW i4, an all-electric sedan, and the BMW iNEXT, an all-electric crossover, are being brought to market in 2021.
Those new vehicles are all based on BMW’s upcoming fifth-generation electric powertrain.
The German automaker plans to make these vehicles in high volume and it is going to need a lot of battery cells to make it happen.
Today, BMW announced that it secured a total of $10 billion worth of battery cells over the next decade from two suppliers.
The bulk of the new volume is coming from CATL, a giant Chinese battery manufacturer who is also building a new factory in Germany.
BMW wrote about the new agreement with CATL:
“The original CATL order volume of four billion euros announced in mid-2018 will now be increased to 7.3 billion euros (contract duration from 2020 to 2031), with 4.5 billion euros for the BMW Group and 2.8 billion euros 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.”
The second battery cell supplier is Samsung SDI, which received a new contract from BMW valued at 2.9 billion euros from 2021 to 2031.
Dr. Andreas Wendt, a member of the Board of Management of BMW AG responsible for Purchasing and Supplier Network, commented on the agreement with the Korean battery manufacturer:
“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,”
Interestingly, BMW plans on sourcing cobalt and lithium itself and will make the minerals available to CATL and Samsung for them to use in their batteries.
The automaker claims that it gives them more transparency in sourcing the minerals, which are sometimes coming from conflict-prone regions.
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