BMW secures ‘ethical’ lithium supply from Australian mines
BMW Group says it has signed an agreement with Chinese supplier Ganfeng Lithium Co. for the delivery of sustainably and ethically sourced lithium extracted from Australian mines.
The deal stretches over a period of 5 years, is worth €540 million and secures 100% of BMW’s lithium-hydroxide needs for the fifth-generation battery cells in its high-voltage batteries, the German OEM says.
“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,” says Dr. Andreas Wendt, member of the Board of Management of BMW AG responsible for Purchasing and Supplier Network.
Direct supply to competing cell makers
From 2020 onwards, BMW Group will be sourcing both lithium and cobalt directly, making the raw materials available to the two battery cell manufacturers it is working with, i.e. 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 company says.
It 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 that it signed a long-term contract worth 2.9 billion euros with Samsung SDI for its fifth-generation electric drive trains (contract: 2021 to 2031).
“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.
In-house competence, but not production – for now
Basically, BMW leaves the cell production to the specialists, who benefit from a much larger scale than BMW would be able to leverage on its own. Still, it has its own Battery Cell Competence Centre in Munich. The aim of the competence centre is to advance battery cell technology and introduce it into production 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.