South Korea’s Samsung SDI and German car manufacturer BMW have expanded its partnership with a “multi-billion euro” deal that includes the supply of Samsung’s lithium-ion batteries to BMW’s future electric vehicles.
Battery maker Samsung currently provides 96-cell 60Ah battery packs for BMW’s i8 plug-in hybrid and i3 electric car models. BMW plans to increase the order by “at least” 20% to 30% in 2016 from its 2014 level.
The assignment also includes technological development of battery cells and next-generation materials.
“The deal will help SDI have greater presence as an electric car battery maker in the U.S. and Europe, where it is relatively less well known compared with other battery suppliers,” commented Lee Sang, analyst at NH Investment & Securities to Bloomberg.
“The deal is an extension of an agreement clinched in 2009,” a communications official from Samsung SDI said and added: “The two models, BMW i3 and i8, are selling very well. It is significant that the deal will continue in future models.” The assignment is said to run for several years.
BMW aims to challenge Tesla’s success with its EV models. Deliveries of the BMW i8 started international markets in June. According to the company, the demand is already significantly higher than the planned production volume for the ramp-up phase.
Samsung recently announced to expand its automotive business after acquiring Cheil Industries and to enter the Chinese market. The company has other contracts with Chrysler, Ford and Mahindra.
Klaus Draeger, managing board member at BMW, said the company will be open to share the battery technology with other car manufacturers to reduce costs of battery cells. “If Mercedes called us, we would be happy to find a way with Samsung SDI to supply them with battery cells,” he added.