BMW Orders Batteries Worth $24 Billion Amid Increasing EV Demand

BMW AG has increased orders for battery cells to maintain pace with accelerating demand for electric automobiles which accounted for more than 11% of deliveries during the first half of 2021.

The Munich-based company has commitments of more than 20 billion euros ($23.8 billion) for batteries, up from 12 billion euros previously. BMW’s Chief Executive Officer Oliver Zipse said in an interview that these cells are destined for i4 sedans, iX sport utility autos and other fashions BMW is producing by 2024. The firm plans to start switching to a new generation of batteries in the next 12 months.

“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.”

Severe shortages of semiconductors have put the automotive sector on high alert and carmakers are seeking to establish different vulnerabilities in their supply chains. Access to sufficient battery cells and raw materials like nickel and cobalt will be critical to established carmakers’ electrification ambitions. As a result, EV bigwigs including Tesla Inc. have signed agreements with the miners to clinch the metal supply.

BMW has recently boosted its cell purchases across China’s Contemporary Amperex Technology Co. Ltd., EVE Energy Co., Northvolt AB in Sweden and Samsung SDI company in South Korea. The CATL shares rose as much as 6.5% in Asia on Monday, whereas Shenzhen-traded EVE Energy elevated by a similar amount.

The company has already prepared a response to the growing EV sales knowing there will be a dearth of semiconductors. Last month, the corporate predicted the situation would worsen by the end of the year. “We said some weeks ago that the second half would be more difficult, and that’s what we’re seeing now,” Zipse said. “It’s more difficult and the problem is here to stay for many months.”