BMW to source battery cells from Samsung SDI and LG Energy Solution in Europe and US

Korean cell makers for Europe and the US

On Monday, 9 November, BMW said it will buy more battery cells made in Europe and the United States from South Korean groups. Samsung SDI is to supply cells to BMW plants in Europe, while LG Energy Solution is to serve the company's sites in the US. The cells are for the sixth-generation high-voltage batteries (Gen6), which are central to the group's new generation of electric models. Deliveries are expected to begin toward the end of the decade. CATL and EVE Energy, which already supply cells to BMW in Europe, remain part of the network. Nicolai Martin, the BMW board member in charge of purchasing and the supplier network, framed the deals in terms of local value creation.

“These partnerships allow us to strengthen value creation in Europe and the United States.”

Shifting supply away from China

BMW expects the arrangement to shorten transport routes for its raw materials and strengthen the security of its supply chain. Handelsblatt reports that China dominates global battery production and the processing of key raw materials, leaving carmakers exposed on capacity near their plants in Europe and North America. The German newspaper also reports that the European Union is working on new rules to strengthen local manufacturing. The so-called Industrial Accelerator Act sets thresholds above which a vehicle must be mostly made in the EU to qualify for a range of subsidies. Stern points out that the companies running the local factories are Asian groups, even as BMW regionalises its supply.

Assembly plants and Bavarian competence centres

According to ANSA, battery assembly is to be handled by five new plants in Germany, Hungary, China, the United States and Mexico, located near BMW's main car factories. Handelsblatt counts a plant in China alongside four plants in Germany, Hungary, Mexico and South Carolina. BMW is also building its own expertise in Bavaria through three centres. The Battery Cell Competence Center in Munich develops cell technology, the Cell Manufacturing Competence Center in Parsdorf focuses on production processes, and the Cell Recycling Competence Center in Salching recovers raw materials through a direct recycling process. The strategy, called Local for Local, aims to build supply chains close to car plants, cut transport distances and support jobs.

Gen6 ramp-up and phase-out of older batteries

Handelsblatt reports that BMW is ramping up worldwide production of its sixth-generation high-voltage batteries. The components are central to the new generation of electric models, such as the iX3 electric SUV. In the week of 2 November, the company also said it is accelerating the phase-out of older battery models. Bloomberg describes the move as BMW widening its supplier base to reduce its dependencies.