BMW and Samsung SDI make a 2.9 bln-euro EV battery supply deal, increases CATL deliveries as well

21 November 2019, 02:51:22

BMW South Korea announced that BMA and Samsung SDI have concluded an EV battery supply deal worth 2.9 bln-euro. The agreement was signed by BMW's chief purchasing officer, Andreas Wendt. It encompasses a period of 10 years (from 2021 to 2031) during which BMW will buy batteries for EVs from Samsung SDI. The latter is already the main supplier of batteries for BMW but this deal just makes their relationship more solid in the long run. Samsung SDI is the world's fifth-largest battery supplier of EV batteries during H2 of 2019 with a total capacity of 2.9 GWh, according to SNE Research. In addition to BMW, it also supplies batteries to Volkswagen and Jaguar.

"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 announced at a supplier event today in Seoul, South Korea.

In addition, BMW increases the battery supply from CATL - the world's largest battery maker. In mid-2018 there was an initial order volume of 4 billion euros which is now increased to 7.3 billion euros (contract duration from 2020 to 2031). Of those, 4.5 billion euros are for the BMW Group and 2.8 billion euros are for the Chinese BMW production site in Shenyang. BMW is also the first customer for CATL's factory in Erfurt, German, which is currently under construction.

As long as it concerns the environmental issue with sourcing valuable earth materials, BMW says: "The BMW Group 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. This gives the company full transparency over where both raw materials come from. Compliance with environmental standards and respect for human rights have the highest priority. The BMW Group's fifth-generation electric drive trains from 2021 on will also be produced entirely without using rare earths." "This means we will no longer be dependent on their availability," explained Wendt.

Again, BMW stresses on the fact that by 2023, the BMW Group will have 25 electrified models in its line-up. More than half of them will be fully electric vehicles. The aim is to increase the percentage of electrified vehicles in the new vehicle fleet by a quarter in 2021 and a third in 2025; by 2030, they should account for half of sales volumes.

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