BMW targets 30% battery price drop to take on Tesla – Automotive News Europe

BMW will switch to the next generation of lower-cost batteries for its new electric-vehicle platform from 2025 as automakers battle rising prices for raw materials.

BMW will use round cells instead of prismatic ones for its “Neue Klasse” (New Class) underpinnings, following Tesla’s lead. The U.S. automaker has been using a cylindrical shape for some time.

The change will deliver a 30 percent drop in costs, according to people familiar with the plans.

The new round cells will be manufactured by BMW’s existing partners, the people said, declining to be named discussing internal deliberations.
The manufacturer currently buys batteries from China’s CATL and EVE Energy, South Korea’s Samsung SDI and Sweden’s Northvolt.

Cells typically make up four-fifths of the price of a battery pack and improving technology and efficiency have typically delivered annual cost reductions. That trajectory has come under strain due to record price rises of key inputs like lithium and nickel, challenging automaker forecasts of soon selling EVs for a similar margin to combustion-engine cars.

While BMW snatched the global luxury sales crown from Mercedes-Benz last year, the Munich-based company’s cautious electric-car strategy does not have the same cachet as its German rival.

Mercedes’s Vision EQXX, a near-production prototype with batteries destined for compact cars from as early as 2024, drove more than 1,000 kilometers (621 miles) this year from Germany to the French Riviera on a single charge, outdoing Tesla.

Stuttgart-based Mercedes’s automaking margins are also ahead, jumping to a record 16.4 percent during the first quarter.

BMW has said it will initially focus its Neue Klasse architecture on full-electric models for the midsize premium segment, such as future generations of the 3 Series. The platform, which will go into production in 2025 at the automaker’s new factory in Hungary, will only offer a battery-electric drivetrain.

Last year, automakers paid an average of $118 for each kilowatt hour of a pure electric vehicle battery pack, according to BloombergNEF’s 2021 study on lithium ion battery prices. BMW’s pack costs are already below this level, the people said.

The energy density of the new BMW cells will be higher than Tesla’s round cells by at least a low double-digit percentage, the people said, without giving further specifics.

That might help BMW build electric vehicles with a longer driving range than its American competitor.

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