BMW Willing To Cooperate With Rivals For Battery Technology
|   Thursday, July 24, 2014
The great automakers seek new partners on the market to engage and raise the orders for Lithium-Ion batteries for electric and hybrid cars, the ultimate goal being to lower prices. 
After having invested considerable amounts ranging in the hundreds of millions of euros together with Samsung SDI in auto battery development for the new range of its electric and hybrid cars, BMW announced that it would not refuse a request from rival brands who would like access to this type of battery.


The reason for this is the fact that a greater demand for batteries would decrease their production costs, which would lead to more affordable electric cars. At this time, 30 – 40 percent of the price of electric cars is battery costs.

"If Mercedes called us, we would be happy to find a way with Samsung SDI to supply them with battery cells," stated Klaus Draeger, BMW acquisition office manager, quoted by Automotive News.


At this moment, BMW uses batteries produced by Samsung SDI on the i3 and i8 models. However, the same type of technology will be part of the hybrid offer that BMW will put in front of customers in the X5 and X3 range. Thus, according to the agreement between BMW and Samsung SDI, the automaker will increase the number of orders for batteries by 20 – 30 percent in 2016 compared to this year.

The agreement was contained in a memorandum of understanding signed between the two companies, which also include joint development of the next generation of batteries.

BMW sold in the first half of the year 5,400 units of the i3 city electric model, while the German manufacturer's total sales slightly exceeded one million cars worldwide. The production rate of i3 grows steadily so far: from 100 units per day at this time, the Germans plan to reach 140 copies in early autumn. In addition, the i8 hybrid supercar, recently released in Europe and currently being launched in the United States, will contribute to increased production levels.

Samsung SDI, BMW's partner in terms of development and car battery production, is also working with Chrysler, Ferrari and Apple, and produces 600,000 lithium-ion battery cells per month in Ulsan, South Korea.

The main competitors in this market are LG Chem (Renault) and Panasonic (Tesla Motors). The overall market for lithium-ion batteries will reach 4.4 billion dollars this year, and forecasts indicate that it will increase by almost five times by 2020 (according to Japanese research firm B3, the global market for automotive lithium-ion batteries will increase to 21.3 billion dollars in 2020 from 4.4 billion dollars in 2014).

Lee Sang Hyun, analyst at NH Investment & Securities, said that BMW's deal will help SDI have an increased presence as an electric battery maker in the US and Europe, where it enjoys a lower level of notoriety compared to other battery suppliers.

Klaus Draeger admitted that one of the challenges for of the electric cars batteries is the limited driving range.
"This is why the whole industry is still looking very much at fuel cells because it is not clear what is also happening on the side of the electric infrastructure," he said, further noting that BMW is doing research on a fuel cell vehicle system too.
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