BMW Orders $1 Billion in EV Batteries from China's CTAL

author: Eric Walz   

German automaker BMW has awarded a contract worth a little over billion euros ($1.16 billion) to China's lithium-ion battery maker Contemporary Amperex Technology Ltd (CATL). The news, first reported by Automotive News Europe, will allow CATL to build a factory to produce cells for electric vehicles in Europe, BMW spokesman Glenn Schmidt said. CTAL is China's biggest lithium battery manufacturer.

An official signing ceremony will take place at a summit in Berlin with China's Premier Li Keqiang on July 9, sources told Automotive News Europe.

CATL is looking at potential locations for a battery production facility in Europe. The German state of Thuringia encouraging the company to use a site near Erfurt in eastern Germany. CATL is also exploring locations in Poland and at least one other country in Europe, sources told Bloomberg.

European auto-parts makers have been reluctant to allocate the significant funds needed to challenge major Asian battery producers Samsung SDI, LG Chem, and Panasonic. Panasonic is the sole battery provider to Tesla and makes the batteries for Tesla's electric vehicles  in a joint partnership.

Automotive OEM part supplier Robert Bosch GmbH decided earlier this year against making battery cells, citing excessive costs exceeding 20 billion euros ($23.5 billion).

CATL is banking on China's drive to help curb pollution from traditional combustion engines and increase the country's presence in the overseas new energy vehicle (NEV) market. Based in Fujian province, CTAL sold 11.85 GWh of lithium batteries last year, the largest amount in the world, according to Reuters.

Last month, BMW rival Daimler placed an order with CATL to buy electric car battery cells.

In addition, CTAL aims to expand into car production and was listed as a "sizeable investor" in a $500 million fundraising for Chinese electric vehicle start-up Byton.

China accounted for more than half of all global new energy vehicles (NEV) sold last year and surpassed the U.S. in EV sales in 2015. NEV sales in China rose 141.6 percent in the first five months of 2018, reaching 328,000 units. As a result, Chinese automakers looking to increase battery production as NEV sales grow rapidly.

China's biggest NEV producer, BYD announced this week the launch of what will become the world's biggest lithium battery plant, surpassing in size Tesla's Nevada Gigafactory, which is currently the world's largest. BYD plans to increase its own battery production to 60 GWh a year by 2020.

Eric Walz

Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.