Late last month, BMW’s CEO, Mr. Harald Krueger unveiled to the world, in an interview, that BMW plans to add a third supplier of batteries to its roster, this time a Chinese company otherwise known as CATL (Contemporary Amperex Technology). The announcement took some people by surprise, especially since the Germans made quite a big deal out of their new battery research center located near their HQ in Munich, in which they invested 200 million euros.
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At the moment, details were scarce but a new report from Reuters offers more insight into BMW’s plans for the future. According to the company’s purchasing head, Markus Duesmann, this is a long-term plan, to make sure the company has a strong and reliable battery source for the years to come, when demand will surely go up. The Chinese company will actually build a new factory in Germany, in Erfurt, as a first step in Europe.
CATL is currently the world’s biggest supplier of batteries for electric vehicles and has extensive expertise in the field. This expansion in Europe will start with the new plant in East Germany which will see an investment of around 240 million Euros at first. BMW’s head of purchasing said that BMW will buy batteries worth around 4 billion euros over the next decade from CATL with 1.5 billion worth being sourced from the European plant.
As for the BMW battery research center, it appears it won’t be used to manufacture batteries itself but instead develop better solutions which will be implemented by the manufacturers the Germans are working with, at least for now, as Duesmann didn’t offer a clear answer to this question saying “I don’t rule it out.” The CATL plant will create about 600 jobs in the Thuringia region and will reach a production of 14 GWh by 2022. While this is viewed as a step forward by some, German chancellor Angela Merkel said that she would prefer it if Europe had its own manufacturer, so that German giants wouldn’t depend on batteries made by Chinese or South Korean manufacturers. “If we could do it ourselves, then I would not be upset,” Merkel said according to Reuters.
BMW also was adamant to go on record to say that they are sourcing raw materials for the cells itself to pass to the battery makers, in particular cobalt, and is currently negotiating long-term contracts. Duesmann said BMW would only conclude contracts where inhuman conditions and child labor were ruled out. It said it was not sourcing cobalt from mines in Democratic Republic of Congo.