BMW Group localises battery cell supply chains in Europe and the US

As demand for battery electric vehicles (BEVs) continues to grow and BMW Group transitions towards production of more electric vehicles, the automaker is taking a "local for local" approach to sourcing the sixth-generation (Gen6) high-voltage batteries used in its Neue Klasse vehicles.

Combining regional supply chains with a globally diversified supplier network, BMW Group has announced new contracts with two additional cell suppliers to localise battery production in both Europe and the US.

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Samsung SDI will be added to the list of manufacturers supplying BMW Group with Gen6 batteries in Europe, as well as existing suppliers CATL and EVE Energy. Meanwhile in the US, a new contract will see these batteries also supplied by LG Energy Solution. According to BMW Group, these additional manufacturers will supply the group from their established plants in the respective regions from the late 2020s onwards.

"Our global partner network with leading cell manufacturers ensures that we have a resilient, flexible and competitive battery cell supply,” commented Hendrik Lang, head of purchasing and quality of high-voltage batteries at BMW.

In addition, Nicolai Martin, member of the board of management of BMW responsible for purchasing and supplier network, noted that diversifying procurement is an integral part of the group's purchasing strategy. He emphasised that being successful in different markets around the world and ensuring the global competitiveness of its products are top priorities from BMW Group.

"To achieve this, we operate as locally as possible in our value chains, leveraging the potential of our global procurement markets," said Martin. "Through our battery cell partnerships, we are actively strengthening value creation in Europe and the US."

Local battery assembly

BMW's "local for local" approach extends beyond battery sourcing to battery assembly too. Currently, production of BMW's Gen6 high-voltage batteries takes place at five recently built production facilities strategically located near its vehicle plants in regions around the world.

By locating these battery assembly facilities in close proximity to existing plants, BMW Group has said it is able to strengthen regional infrastructure and existing facilities, while helping to secure jobs.

The group also noted that this strategy allows it to reduce the distances between its suppliers, its battery facilities and its vehicle plants. In doing so, BMW Group can keep down transport costs, avoid carbon emissions from long-distance shipments and limit the group's exposure to transport-related disruptions.

Upskilling for the whole battery life cycle

Alongside the diversification of suppliers and its investment in building regional battery ecosystems, BMW Group has also focused on building comprehensive in-house expertise in the development, production and recycling of battery cells.

As part of this effort, the group has established a range of competence centres across the Germany state of Bavaria, each exploring different parts of the battery life cycle. For example, at BMW's Battery Cell Competence Center (BCCC) in Munich, experts are exploring new cell technologies for future high-voltage batteries.

And at the group's Cell Manufacturing Competence Center (CMCC) in Parsdorf, research is focused on methods of producing the highest-quality battery cells with the most efficient use of resources.

BMW Group is also working with its partner Encory to build and operate a new Cell Recycling Competence Center (CRCC) in Salching. Here, valuable raw materials will be recovered and reintegrated into the group's production process, using an "innovative direct recycling concept" that BMW Group has developed.