BMW agrees US$4.7 billion contract with China's CATL for battery cells

Irving Hamilton
July 11, 2018

Following an announcement from BMW Group that it will be ramping up production in China to serve its largest market, the German automaker also confirmed Monday that it will raise prices on USA -built crossover SUVs in response to President Trump's proposed foreign-built vehicle tariffs. So, according to Autoblog, BMW is hedging its bets by getting into bed with a Chinese battery manufacturer called Contemporary Amperex Technology Ltd., or CATL.

There have been warnings that Europe's lack of its own production capabilities for the cells that power electric cars could leave its vehicle industry exposed and too reliant on others.

While Washington and Beijing trade barbs with each other over billions worth of import tariffs, German chancellor Angela Merkel welcomed the Chinese premier Li Keqiang and his delegation to Berlin on Monday (July 9).

"It's good that it [the factory] doesn't go to eastern Europe instead", Dudenhöffer said. CATL reached shipments of 12 GWh in 2017. "CATL is a very open company, whether it is German or not does not matter".

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Duesmann said earlier BMW had invested in some of the costs for the CATL factory in Erfurt, but both he and Zeng declined to say how much.

At the iX3 debut event in Beijing, BMW said the vehicle would have a 270-horsepower electric motor and a 70-kwh battery delivering a range of 250 miles. "I don't rule it out", he said.

However, BMW has no plans to jointly purchase cells with rival Daimler, he said, because of the competitive advantage that can be gained if batteries give greater range or can be charged faster.

Furthermore, the contract also states that sourcing materials for batteries is the responsibility of CATL, which is good, because as we've covered in the past, price fluctuations in minerals like lithium and cobalt can be enormous.

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