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China’s CATL secures EUR1bn battery order from BMW

ABR Staff Writer Published 29 June 2018

German luxury automaker BMW has selected Chinese company CATL to manufacture lithium-ion batteries for its next generation of electric vehicles (EVs).

BMW CEO Harald Krüger stated that the batteries manufactured by CATL will be used in the company’s iNext sedan, the fifth generation product.

The rest of the electric powertrain will be produced at BMW’s own factories.

Besides awarding a billion Euro contract to CATL, the company will invest €200m in battery research in Munich, Germany.

The news was first reported by Handelsblatt and was mentioned by BMW.

As per BMW, a European manufacturer was preferred if the proposition had been competitive, but for now, the company needed a manufacturer ‘who is already there’. For the purpose of producing batteries, CATL is expected to setup a special factory nearby Erfurt. One of the main requirements is that the facility be physically close to Munich.

American electric vehicle producer Tesla has also partnered with Panasonic, the Japanese technology company to produce batteries and has also setup its Gigafactory to produce batteries.

Presently, Asian companies hold 90% of market share for producing lithium-ion batteries needed to power electric vehicles. European companies have been reluctant in allocating funds for producing batteries and compete with Asian companies including Samsung, LG Chem and Panasonic.

German auto-supplier Bosch is planning to setup its own lithium-ion batteries producing facility. Last month BMW’s rival Daimler also placed an order with CATL to buy battery cells.

CATL is Fujian province based company which has sold 11.8GWh of lithium batteries last year, which is claimed to be the highest in the world. It is planning to expand into car production. Recently, the company invested $500m in Chinese NEV start-up Byton.

Recently, BMW Shanghai opened a new Research & Development Center in China, where the company will research on several areas including digital services, autonomous driving and automotive design.

The company in a statement said: “With China leading the way for innovation worldwide, the BMW Group values the country’s importance as a driver of innovation and will continue to increase its R&D investment there.”

Image: BMW has selected CATL to produce batteries for EVs. Photo: Courtesy of BMW AG.