The BMW Group has signed two more battery cell suppliers for its sixth-generation (Gen6) high-voltage batteries: Samsung SDI in Europe and LG Energy Solution in the US. Both will supply cells from their existing plants in those regions from the late 2020s. The move is part of BMW’s ‘local for local’ strategy of sourcing parts close to where its cars are built.

The BMW Group is widening its battery cell supply base. The company says Samsung SDI will supply cells for its Gen6 high-voltage batteries in Europe, and LG Energy Solution will do the same in the US. Each will deliver from its established plants in that region, starting in the late 2020s.

With these contracts, BMW will buy European-made cells from three suppliers: CATL, EVE Energy and Samsung SDI. LG Energy Solution becomes a cell supplier for BMW’s operations in the US.

Why the battery supply chain matters

BMW calls the high-voltage battery a core part of any electric vehicle. It affects key qualities such as range and charging performance. The company buys its cells from large outside manufacturers. It aims to combine regional supply chains with a supplier network spread across several countries.

Under its ‘local for local’ principle, BMW buys components near its vehicle factories wherever it can. According to the manufacturer, this shortens transport distances, improves supply security and builds up local industry in its three key regions: Europe, Asia and North America.

Diversifying procurement is an integral part of the BMW Group’s purchasing strategy. We aim to ensure our products’ global competitiveness and to be successful in different markets. To achieve this, we operate as locally as possible in our value chains, leveraging the potential of our global procurement markets. Through our battery cell partnerships, we are actively strengthening value creation in Europe and the US.

That is the view of Nicolai Martin, the BMW AG board member responsible for Purchasing and Supplier Network. Hendrik Lang, Head of Purchasing and Quality of High-Voltage Batteries at BMW AG, adds: “Our global partner network with leading cell manufacturers ensures that we have a resilient, flexible and competitive battery cell supply.”

Five battery plants near the car factories

The same approach applies to battery assembly. BMW builds its Gen6 packs at five new facilities, each located close to a vehicle plant:

  • Irlbach-Straßkirchen (Lower Bavaria, Germany)
  • Debrecen (Hungary)
  • Shenyang (China)
  • Woodruff (USA)
  • San Luis Potosí (Mexico)

The company says this setup keeps distances short between cell suppliers, battery plants and car factories. It adds that the plants also support local infrastructure and help secure jobs.

BMW admits that moving cell production closer to its factories is a complex task. It requires heavy investment, working supply chains and technology partners who are willing to set up locally. The group says its long-term goal is complete regional battery ecosystems. It argues that this depends on attractive local conditions and on political rules that give manufacturers enough time to ramp up production.

In-house cell expertise in Bavaria

BMW does not make its own production cells, but it keeps several cell competence centres in Bavaria. “Our competence centers enable us to actively shape technological developments and meet our partners on an equal footing,” Lang explains.

  • Battery Cell Competence Center (BCCC), Munich: research into new cell technologies for future high-voltage batteries.
  • Cell Manufacturing Competence Center (CMCC), Parsdorf: develops high-quality, resource-efficient cell production and builds and tests near-series cells.
  • Cell Recycling Competence Center (CRCC), Salching: recovers raw materials using a direct recycling process developed by BMW and returns them to production. Encory GmbH will build and run the site, while BMW owns the intellectual property for the method.

What it means

The Gen6 battery is the base of BMW’s latest generation of electric cars. Adding more suppliers in more regions gives the company more options if one supplier or trade route runs into trouble. It also follows the wider industry move towards building batteries close to where the cars are sold. BMW has not disclosed volumes, contract values or exact start dates.

Samsung SDI and LG Energy Solution are due to start supplying BMW from the late 2020s.

Source: newsroom.bmwgroup.com