German vehicle OEM BMW has secured long-term supply deals worth a total of €10 billion ($11 billion) from lithium-ion cell manufacturers Contemporary Amperex Technology (CATL) and Samsung SDI.
The supply agreements come as BMW forges ahead with e-mobility plans.
The biggest deal bolsters the company’s relationship with China’s CATL, increasing last year’s €4 billion ($4.4 billion) supply deal to €7.3 billion ($8 billion). The 11-year contract starts next year.
The supply agreement comprises of €4.5 billion ($5 billion) for the BMW Group, with the remaining order for the Chinese production site of the BMW Brilliance Automotive.
The BMW Group will also be the first customer of the CATL’s German battery cell plant when construction ends, a plant the OEM supported and played an active part in establishing in Erfurt, Germany. The 14GWh plant is due online by 2022
BMW has also signed a 10-year supply contract for its fifth-generation electric drive trains with Korea’s Samsung. The contract, worth €3 billion ($3.3 billion), begins in 2021.
Dr. Andreas Wendt, BMW board member responsible for Purchasing and Supplier Network, said: “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.”
The deals will include BMW sourcing its own battery materials, with the cobalt coming from Australia and Morocco and the lithium from Australia, to give them full transparency over where the raw materials are sourced as BEST reported last April.
From 2021 on, BMW’s fifth-generation electric drive trains will also be produced without using rare earths, to avoid dependency on their availability, said Wendt.
On 14 November, BMW opened its Battery Cell Competence Centre in Munich, Germany, to advance battery cell technology and introduce it into production processes.
“Whether we then produce the cells ourselves at a later date, will largely depend on how the supplier market develops,” said Wendt.
Last year, BMW formed a joint technology consortium with Swedish lithium-ion start-up Northvolt and Belgium-based materials tech giant Umicore, to develop a “complete and sustainable value chain for battery cells for EVs in Europe”.
