BMW to source batteries from new Chinese plant in Germany

BMW to source batteries from new Chinese plant in Germany

German carmaker BMW is to source battery cells for its fully electric BMW i-next from a new plant being built in eastern Germany by Chinese manufacturer CATL, BMW announced at its Munich headquarters on Monday.

BMW head of purchases, Markus Duesmann, said the carmaker would from 2021 buy in batteries to the value of 1.5 billion euros (1.8 billion euros) from the factory CATL is planning in Erfurt in the eastern German state of Thuringia.

Chinese Prime Minister Li Keqiang is set to sign the deal for the new plant on Monday during his visit to Germany.

BMW will spend a further 2.5 billion euros to procure batteries from CATL in its home market in China, in particular for BMW’s electric Mini, which will start to come off its British production line in Oxford next year.

Duesmann said BMW would be the first customer for CATL’s Erfurt plant. He noted that costs would decline through upscaling and it would “not be bad, if Daimler were to buy from Erfurt as well” in reference to BMW’s main German competitor.

Samsung is currently the main battery provider to BMW, with the South Korean company’s products used in the BMW i3.

The powerful IG Metall union welcomed the decision to build the CATL plant as a good sign for Thuringia, saying it marked a reversal of the state’s former low-wages policy to a high-tech production site.

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