Although the cost of batteries will still be affected by rising raw material prices, BMW still needs to develop battery packs that can provide higher battery life, otherwise it will be left behind by Mercedes-Benz and Tesla.
1. Select existing partners to supply but it is difficult to increase profits
The new cylindrical batteries will be made by BMW’s existing partners, who declined to be named because the collaboration is still under internal deliberations, the people said.
▲Tesla cylindrical 4680 battery
It is understood that at present, BMW from CATL and EVE Energy, South Korea’sSamsungSDI and Sweden’s Northvolt buy batteries, so the supplier of cylindrical batteries should be one or more of these four.
The energy density of the new BMW cells will be at least a low double-digit percentage higher than Tesla’s round cells, the people said, without providing further details. That could help BMW make electric cars with longer range than Tesla.
But the cost of batteries will still rise, and it will be difficult for the profit margin of electric vehicles to rise in the short term.
Generally speaking, batteries generally account for four-fifths of the total cost of a battery pack. And as battery technology improves and production efficiency increases, the total cost will decrease. However, the price of lithium and nickel, the main raw materials of batteries, has risen sharply, which also affects the proportion of battery costs in the total cost.
So, that overturns automakers’ predictions that EVs will soon have similar profit margins to gasoline-powered cars.
2. BMW’s battery life needs to be improved and is still expected to surpass Tesla
It is understood that BMW, which took the global luxury sales champion from Mercedes-Benz last year, is still trying to catch up with its existing rivals in battery life.
▲ BMW i4
It is understood that Mercedes-Benz’s Vision EQXX is a near-production prototype car, and its battery pack will be used in other Mercedes-Benz compact cars as early as 2024. The Vision EQXX can travel more than 1,000 kilometers from Germany on a single charge, surpassing Tesla. It is reported that Tesla’s highest battery life model is the Model 3 high-performance version, with a CLTC battery life of up to 675 kilometers.
The current BMW model with the highest battery life is the BMW i4 eDrive40 version, with a CLTC battery life of up to 625 kilometers. BMW said it will initially focus the Neue Klasse architecture on all-electric models in mid-size premium models, such as future generations of the 3 Series. The platform, which will go into production at the automaker’s new plant in Hungary in 2025, will only be available with a battery-electric drivetrain.
Separately, automakers paid an average of $118 per kilowatt-hour (about 796 yuan) for battery packs in pure electric vehicles last year, according to Bloomberg New Energy Finance’s 2021 Lithium-Ion Battery Price Study. And people familiar with the matter said that BMW’s cost has been lower than this level. It will also help BMW make electric cars with longer range than Tesla.
Conclusion: BMW’s electrification transformation is under pressure
BMW has also launched a number of new cars after announcing the electrification transition. But for companies, the profit margin of electric vehicles is still lower than that of gasoline vehicles. If the cost of batteries can be reduced or the profit margin can be improved, but the price of battery raw materials is currently rising, and it is difficult to reduce the cost of batteries for a while.
In addition, it is not enough for BMW to choose a cylindrical battery. It also needs to increase the battery capacity and improve the battery life. Otherwise, it will lose its appeal to consumers and fall behind its competitors.
Car stuff (public account: chedongxi) Author | wayEdit | Juice