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BMW to buy 4 billion euros worth of batteries from CATL

CATL will supply 1.5 billion euros of batteries from a plant it is building in Germany

German car maker BMW will source 4 billion euros worth of battery cells from the world’s biggest battery maker, China’s CATL.

The purchase will be spread out over the next couple of years.

CATL’s cells will be used to in BMW’s electric Mini and the upcoming “iNext” electric limousine, slated for production from 2021.

1.5 billion euros worth of battery cells will come from CATL’s new factory in Erfurt, Germany, with the remainder coming from the company’s Chinese plants.

German Chancellor Angela Merkel will meet with Chinese Prime Minister Li Keqiang in Berlin on July 9, during which the contract to build the factory will be signed. More details about the plant are expected to emerge around that time.

BMW’s purchasing boss, Markus Duesmann, said his company was investing in cell research but a decision on whether to produce battery cells itself had not been made. BMW has also invested in some of the costs for the CATL factory, but declined to say how much.

He added that BMW would also be happy to see other companies invest in the factory as well.

Europe has been facing pressure to develop its battery production capacity. Many European countries are pushing ambitious emission-reduction plans, with EVs playing a central role in them.

However, European supply chains lag behind many of the region’s economic counterparts, especially China, which not only produces huge volumes of batteries, but which has taken steps to ensure it has access to the raw materials needed to make them.

While the new factory will go some way to alleviate the gap between European production and the rest of the world, it will still be in the hands of a Chinese company, placing it within the Chinese government’s sphere of influence.

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