On July 14, BMW announced that it has entered into a new agreement with Samsung to supply batteries for its i3 and i8 models. The company expects to increase battery orders by “20 – 30%” by the end of 2016. In addition, BMW and Samsung will cooperate in the development of the next generation of battery cells, an effort to counter the Panasonic-Tesla team-up.
Batteries are such a large part of the cost of electric vehicles, and BMW is anxious to find ways to reduce that expense. That has it considering sharing its technology with others to achieve economies of scale. “If Mercedes called us, we would be happy to find a way with Samsung SDI to supply them with battery cells,” said Klaus Draeger, head of purchasing at BMW.
BMW began working with Samsung SDI, a Samsung subsidiary, on lithium-ion battery cells in 2009. Samsung SDI supplies battery cells to Fiat-Chrysler in the United States for the Fiat 500e battery powered minicar ,and to Ferrari for the limited edition LaFerrari hybrid model. It also is Apple’s primary battery supplier for products like the iPhone. Its competitors include South Korea’s LG Chem, which supplies Renault, and Panasonic, which supplies batteries to Tesla.
According to Japanese research firm B3, the global market for automotive lithium-ion batteries will increase to $21.3 billion in 2020 from $4.4 billion in 2014. Samsung SDI builds 600,000 battery cells a month on two production lines in Ulsan. The company will add a third production line by the end of the year to take monthly output to 900,000 battery cells.
At the ceremony announcing the new cooperation agreement with Samsung, BMW’s Draeger said that one of the challenges for battery electric cars is the limited driving range called range anxiety. “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, adding that BMW is also doing a research on a fuel cell vehicle system.