BMW’s balance of power 

According to BMW forecasts, by 2021 the demand for electric vehicles (EVs) is likely to double compared to what it was in 2019. Figures provided by Ultima Media’s Automotive business intelligence unit put sales of pure EVs last year at around 2.2m. Factoring in all electrified vehicles, including hybrids, that figure climbs to 9.2m. BMW says that after 2021 there will be a steep growth curve up to 2025, with sales of EVs growing on average by more than 30% annually.

The company already has a 6% share of the market for new registered battery electric and photovoltaic electric vehicles but, to meet the increase in demand in the coming years, BMW has plans to have 1m fully electric and hybrid vehicles on the road by the end of 2021.

“We are already right at the forefront of electromobility,” said Oliver Zipse, chairman of the board of management at BMW, speaking at the international motor show (IAA) in Frankfurt last September. “No manufacturer has delivered more electrified cars to customers in Germany so far this year.” 

Those plans are set to continue and by 2025 the carmaker says it will have a share of the EV market of between 15-20%. At that point BMW Group will offer five fully electric vehicles. Alongside the BMW i3, which saw demand increase by approximately 20% in 2019, in December BMW began production of the fully electric Mini at its Oxford plant in the UK.

Next on the list is the fully electric iX3, which will go into production in Shenyang this year (2020), followed in 2021 by the BMW iNext, which will be built at the Dingolfing plant in Germany. In the same year the company will start making the BMW i4 at its plant in Munich. The company has also recently signed a deal with China’s Great Wall Motor to build a €650m joint venture plant in Zhangjiagang that will make future fully electric volumes of its Mini brand. The joint venture is called Spotlight Automotive.

“By 2023, the company will already offer 25 electrified models, more than half of which will be fully electric,” said a spokesperson for BMW. “Flexible vehicle architectures, which allow a model to be driven fully electrically, as a plug-in hybrid or with a combustion engine, form the basis for this, as well as a highly flexible production system.”

According to the company’s forecasts, over 50% of new vehicle registrations in China’s premium segment will be pure battery-electric vehicles in 2030, while the figure for Europe will be about half of that, though Europe is expected to see an increase in EV sales from next year, with Bloomberg NEF forecasting growth of 35% in the first nine months of 2020.

BMW also says that 25% of new vehicles sold in the US in 2030 will be electric (though even that seems optimistic under the present regime).

Localising battery supply

In Germany BMW has a 21% share of the electrified vehicle market and sells more than twice as many electric cars as the market average. Around 17,000 were registered between up to September 2019 and in November it sold 17,480, an increase of 18.4%.

Underpinning this is a logistics strategy aimed at keeping the transport of lithium-ion batteries to a minimum. BMW is currently operating three battery factories globally: in Dingolfing, Germany; Spartanburg, USA and Shenyang, China. These battery factories are supplying the local assembly plants.

“Transportation of batteries is not easy because of weight, safety and other considerations,” says a spokesperson for BMW. “Therefore, the BMW Group is producing the batteries as locally as possible."

It has also localised battery production in Thailand and is working with the Dräxlmaier Group, which launched a battery production plant in Chonburi in September supplying BMW 5-Series PHEV production in Rayong.

The company is following the regulatory requirements for the transport of batteries in each country and all of the batteries used in series production have been passed with UN3480 certification, meaning they can be transported safely without the need for dangerous goods packaging. BMW is therefore using standard packaging.

In Europe BMW and its transport providers have to comply with The European Agreement Concerning the International Carriage of Dangerous Goods by Road (ADR), which requires specially qualified staff.

“All of our European transports from the BMW Group plant in Dingolfing, which produces batteries and modules, to the vehicle plants, are classified as dangerous goods transports,” says BMW. “Such a dangerous goods transport needs to be driven by a truck driver trained for dangerous goods.”

BMW’s top-selling EVs in Germany in 2019 (Jan-Sep)

Model                                                       units registered

BMW i3                                                  7,350

BMW 225xe Activeourer (PHEV)            3,800

BMW 530e                                             2,660

Partners in charge

In terms of the battery cells making up the finished battery, BMW says it has access to the best technology based on its lead position in the global market for EV production. South Korea’s Samsung SDI and China’s Contemporary Amperex Technology (CATL) are supplying the cells for BMW’s battery manufacture, and CATL is currently building a plant in Erfurt, Germany for European supply. According to BMW it will be the most modern battery cell production facility in the world.

Construction began in October (2019) and it is the first lithium-ion battery plant to be built in Europe. BMW says it contributed to bringing the plant to Europe through “intensive discussions” with CATL and the government in Germany.

“We strongly supported and played an active part in establishing CATL in Germany,” says Dr Andreas Wendt, member of the Board of Management of BMW responsible for Purchasing and Supplier Network.

BMW is the first customer for the CATL plant but in time it will also be supplying Daimler, VW and Volvo, as well as tier one supplier Bosch. CATL says it is putting together a support team to manage logistics, quality management, operations maintenance, and local purchasing and development.

In November (2019) BMW extended its contract with both CATL and Samsung SDI. BMW had an existing order with CATL worth €4 billion, which it extended to €7.3 billion running between 2020 and 2031.

BMW also signed a long-term supply contract for its fifth-generation electric drivetrains with Samsung SDI. The contract, with value of €2.9 billion, runs between 2021 to 2031.

“In this way, we are securing our long-term battery cell needs,” said Wendt at a supplier event held in Seoul, South Korea back in November. “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.”

In terms of a second life for the batteries, BMW is increasingly using recovered units to power its plants. It has a ‘battery storage farm’ in Leipzig, Germany that can connect up to 700 BMW i3 high-capacity batteries to help lower energy costs at the Leipzig assembly plant as well as feeding into the local power grid.

For those batteries that can no longer be used as stationary storage devices the company has been developing recycling techniques with the aim of achieving a recycling rate in excess of 90%. Its Battery Cell Competence Centre, which opened in November (2019) aims to build toward that target.

“The Battery Cell Competence Centre will enable the BMW Group to build even greater expertise in the recycling of batteries and to work even more intensely on recycling techniques that lend themselves to use on an industrial scale,” says the company.

BMW and ethical materials sourcing

As the demand for lithium-ion batteries has increased, driven not just by the take up by the automotive industry, so have issues related to the ethical sourcing of the materials used in them. The industry has a problem in gaining good supply chain visibility at the source and a number of initiatives have been launched by carmakers over the last couple of years. A number of carmakers, including Audi, Mitsubishi, Renault, Volvo and VW, are signed up to the Global Battery Alliance, which was launched in 2017 to end child labour, hazardous working conditions, pollution and environmental damage in the global battery supply chain.

Separately Daimler established a Human Rights Respect System to monitor human rights issues in its supply chain and Mercedes-Benz Cars is working with the Responsible Cobalt Initiative on ways to counter social and ecological risks throughout the cobalt supply chain.

BMW is sourcing the cobalt used for cell production directly from mines in Australia and Morocco and making it available to CATL and Samsung SDI. The same applies to the lithium, which the carmaker will also source directly from mines, including from Australia. BMW says this gives it full transparency over the raw materials source ensuring it is in compliance with environmental standards and human rights priorities.

Back in 2018 the carmaker formed a technology consortium with battery developer Northvolt and Umicore, a producer of active materials for battery cells, to develop a complete and sustainable value chain for batteries for electric vehicles (EVs) in Europe. It said at the time its chief objective was to make battery cells sustainable by establishing a closed lifecycle loop that covered design, manufacturing via mainly renewable energy, primary use as a drive battery, possible secondary use for stationary energy storage, recycling of the cell and reuse of the raw materials.

In addition, from 2021 BMW’s fifth-generation electric drive trains (eDrive), such as will be used in the iX3, will be produced entirely without using rare earths, meaning the company will no longer be dependent on their availability, though it has also signed a five-year contract worth €540m with Ganfeng Lithium, based in China, for the supply of lithium, which it says will secure 100% of its lithium hydroxide needs for fifth-generation battery cells.

BMW was already signed up to the Responsible Cobalt Initiative designed to improve conditions for cobalt miners, their families and neighbouring communities in the Democratic Republic of the Congo (DRC), though it does not source from the country because of the risk of human rights violations.

The DRC is home to most of the world’s known cobalt reserves, accounting for 60% of global supply but up to a fifth of extraction in the central African country is via small-scale subsistence mining which, activists say, is rife with human rights abuse, the use of child labour, poorly enforced labour laws, and health and safety issues.

Current BMW electrified vehicles

BMW i3

BMW i3s

Mini BEV

BMW 745e/Le/Le xDrive

BMW 330e

BMW 530e GEN4 + xDrive

BMW 225xe GEN4

BMW X5 xDrive45e

BMW X3 xDrive30e

BMW i8 Coupé

BMW i8 Roadster

BMW X1 xDrive25Le (China only)

Mini Cooper S E Countryman ALL4