As part of its electromobility expansion, the BMW Group is deepening its existing business relationship with Ganfeng Lithium Co., Ltd. based in Jiangxi (China). The two companies have signed a supply contract for the lithium needed as a key raw material for battery cells. “The projected order volume totals 540 million euros. In this way, the BMW Group is securing 100 per cent of its lithium hydroxide needs for fifth-generation battery cells in its high-voltage batteries,” said Dr. Andreas Wendt, member of the Board of Management of BMW AG responsible for Purchasing and Supplier Network.
The contract is for a term of five years (2020 – 2024).
“Alongside cobalt, lithium is one of the key raw materials for electromobility. With the signing of this contract, we are securing our lithium needs for battery cells,” continued Wendt. “We aim to have 25 electrified models in our line-up by 2023 – and more than half will be fully electric. Our need for raw materials will continue to grow accordingly. By 2025, for lithium alone, we expect to need about seven times the amount we do today.”
Sustainability and security of supply are important factors in the expansion of electromobility. For the BMW Group’s purchasing experts, ethically responsible raw material extraction and processing begins right at the start of the value chain: They are intensively involved throughout our battery cell supply chains – all the way down to the mines themselves. Compliance with environmental standards and respect for human rights have absolute priority.
“Sustainability is an important aspect of our corporate strategy and plays a central role in expanding electromobility. We are fully aware of our responsibilities: Lithium and other raw materials must be extracted and processed under ethically responsible conditions,” underlined Wendt. Ganfeng extracts lithium by mining so-called hard-rock deposits in Australia under the strictest sustainability standards.
The BMW Group already publishes the countries of origin of the cobalt it uses on its website (see here). For the upcoming fifth generation of battery cells, the company has also restructured its supply chains and will be sourcing both lithium and cobalt directly from 2020, making the raw materials available to the two battery cell manufacturers, CATL and Samsung SDI. This ensures full transparency over where raw materials come from. Cobalt will be sourced directly from mines in Australia and Morocco in the future. Supply contracts will ensure the company’s security of supply up to 2025 and beyond.