Critical Minerals and Energy Intelligence

How Many Batteries Does One Car Manufacturer Need?

The answer? A lot! BMW has more than doubled its battery cell orders to over €20 billion (about $24 billion), up from a previous €12 billion.

Speaking in an interview with Bloomberg, BMW CEO Oliver Zipse said the company is ramping up procurement to meet growing EV demand, which now accounts for over 11% of BMW’s vehicle deliveries in the first half of 2021. “We’re following the market,” Zipse said. “The first half has shown that we’re growing and gaining market share. We’re right in the middle of electrification.”

BMW’s battery supply deals are spread among major producers, including China’s CATL and EVE Energy, South Korea’s Samsung SDI, and Sweden’s Northvolt. News of the increased orders gave a bump to battery stocks—CATL shares jumped as much as 6.5%, with EVE Energy seeing a similar lift in Shenzhen trading.

As the Bloomberg article noted, the move comes at a time when automakers are scrambling to move upstream and secure reliable sources of batteries and raw materials like cobalt and nickel. Events this year have exposed just how fragile automotive supply chains can be when it comes to EV production, and BMW clearly wants to eliminate as much risk as possible. Tesla, a step ahead, has already been signing direct deals with mining companies to lock in long-term supplies.

Still, even as BMW leans into electrification, the chip shortage is still an issue and battery metal supplies are far from stable – there simply isn’t enough production online to proof the sector against a black swan event that could push metal prices way up. Zipse warned last month that “It’s more difficult and the problem is here to stay for many months.” He was referring to the chip shortage but he could easily have been referring to battery metal supply security.

Anthony Milewski

Chairman, Nickel 28 Capital

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