Securing raw material supplies for battery cells: BMW Group signs supply contract with Ganfeng for sustainable lithium from mines in Australia

Munich. As part of its electromobility expansion, the
BMW Group is deepening its existing business relationship with Ganfeng
Lithium Co., Ltd. based in Jiangxi (China). The two companies have
signed a supply contract for the lithium needed as a key raw material
for battery cells. “The projected order volume totals 540 million
euros. In this way, the BMW Group is securing 100% of its lithium
hydroxide needs for fifth-generation battery cells in its high-voltage
batteries,” said Dr. Andreas Wendt, member of the Board of Management
of BMW AG responsible for Purchasing and Supplier Network.
contract is for a term of five years (2020 – 2024).


“Alongside cobalt, lithium is one of the key raw materials for
electromobility. With the signing of this contract, we are securing
our lithium needs for battery cells,” continued Wendt. “We aim to have
25 electrified models in our line-up by 2023 – and more than half will
be fully electric. Our need for raw materials will continue to grow
accordingly. By 2025, for lithium alone, we expect to need about seven
times the amount we do today.”


Sustainability and security of supply are important factors in the
expansion of electromobility. For the BMW Group’s purchasing experts,
ethically responsible raw material extraction and processing begins
right at the start of the value chain: They are intensively involved
throughout our battery cell supply chains – all the way down to the
mines themselves. Compliance with environmental standards and respect
for human rights have absolute priority. “Sustainability is an
important aspect of our corporate strategy and plays a central role in
expanding electromobility. We are fully aware of our responsibilities:
Lithium and other raw materials must be extracted and processed under
ethically responsible conditions,” underlined Wendt. Ganfeng extracts
lithium by mining so-called hard-rock deposits in Australia under the
strictest sustainability standards.


The BMW Group already publishes the countries of origin of the cobalt
it uses on its website (see here).
For the upcoming fifth generation of battery cells, the company has
also restructured its supply chains and will be sourcing both lithium
and cobalt directly from 2020, making the raw materials available to
the two battery cell manufacturers, CATL and Samsung SDI. This ensures
full transparency over where raw materials come from. Cobalt will be
sourced directly from mines in Australia and Morocco in the future.
Supply contracts will ensure the company’s security of supply up to
2025 and beyond.


The BMW Group also recently announced that it is increasing the order
volume for battery cells from CATL to 7.3 billion euros (contract:
2020 to 2031) and also signed a long-term contract worth 2.9 billion
euros with Samsung SDI for its fifth-generation electric drive trains
(contract: 2021 to 2031). “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,” added Wendt.


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,” emphasised Wendt.


Extensive in-house expertise throughout entire value chain for
battery cell technology

The BMW Group possesses extensive in-house expertise throughout the
entire value chain for battery cell technology. In-house battery
production takes place at BMW Group Plants Dingolfing (Germany) and
Spartanburg (USA), and at the BBA plant in Shenyang (China). The BMW
Group has also localised battery production in Thailand and is working
with the Dräxlmaier Group in this area.


In mid-November, the company opened its Battery Cell Competence
Centre in Munich. The aim of the competence centre is to advance
battery cell technology and introduce it into production processes.
The company is investing a total of 200 million euros in the location,
which is set to create up to 200 jobs. The production of battery cell
prototypes makes it possible to fully analyse and understand cell
value creation processes. “Whether we set up our own standard
production of cells at a later date will largely depend on how the
supplier market develops,” according to Wendt.


The BMW Group has formed a joint technology consortium with Swedish
battery manufacturer Northvolt and Umicore, a Belgian developer of
battery materials, for the purpose of developing the cell technology
crucial to electromobility. The cooperation will focus on creating a
complete, sustainable value chain for battery cells in Europe,
extending from development and production all the way to recycling.
Recycling of battery components plays a decisive role in closing the
materials cycle as far as possible and maximising reuse of raw
materials as demand for battery cells grows.


BMW Group is a pioneer in electromobility – 25 electrified
models by 2023

The company will have 25 electrified models in its line-up by 2023.
The basis for this is provided by flexible vehicle architectures for
fully-electric vehicles, plug-in hybrids and models with combustion
engines that enable the company to respond quickly to changing
conditions. More than half of the 25 models will be fully electric.
The BMW Group will double its sales of electrified vehicles between
2019 and 2021. The company expects to see a steep growth curve up to
2025: Global sales of electrified vehicles should increase by an
average of over 30 percent every year. In Europe, the company is also
following an ambitious growth logic: The aim is to increase the
percentage of electrified vehicles in the new vehicle fleet to a
quarter in 2021 and to a third in 2025; by 2030, they should account
for half of sales volumes.


As an e-mobility pioneer, the BMW Group is already a leading supplier
of electrified vehicles. By the end of 2019, the company aims to have
more than half a million vehicles with fully-electric or plug-in
hybrid drive trains on the roads. Within two years, the BMW Group will
offer five fully-electric series-production vehicles: Alongside the
BMW i3*, with more than 160,000 units built to date, this year will
see the start of production of the fully-electric MINI* at Plant
Oxford. This will be followed in 2020 by the fully-electric BMW iX3
from Shenyang (China) and, in 2021, by the BMW iNEXT, which will be
produced in Dingolfing, and the BMW i4 from Plant Munich.


Please contact us if you have any questions:


Corporate Communications


Saskia Eßbauer, Corporate Communications,
Telephone: +49 89 382 18364


Mathias Schmidt, Head of Corporate and Culture Communications,
Telephone: +49 89 382 24544





The BMW Group


With its four brands BMW, MINI, Rolls-Royce and BMW Motorrad, the BMW
Group is the world’s leading premium manufacturer of automobiles and
motorcycles and also provides premium financial and mobility services.
The BMW Group production network comprises 31 production and assembly
facilities in 15 countries; the company has a global sales network in
more than 140 countries.

In 2018, the BMW Group sold over 2,490,000 passenger vehicles and
more than 165,000 motorcycles worldwide. The profit before tax in the
financial year 2018 was € 9.815 billion on revenues amounting to
€ 97.480 billion. As of 31 December 2018, the BMW Group had a
workforce of 134,682 employees.

The success of the BMW Group has always been based on long-term
thinking and responsible action. The company has therefore established
ecological and social sustainability throughout the value chain,
comprehensive product responsibility and a clear commitment to
conserving resources as an integral part of its strategy.