BMW agrees on deal for sustainable lithium

11 December 2019

As part of its electromobility expansion, the BMW Group is deepening its existing business relationship with Ganfeng Lithium.

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. In this way, the BMW Group is securing 100% of its lithium hydroxide needs for fifth-generation battery cells in its high-voltage batteries,’ said Andreas Wendt, member of the board of management of BMW AG responsible for Purchasing and Supplier Network.

′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.’

Ethical sources

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 begin right at the start of the value chain. They are intensively involved throughout the battery cell supply chains – all the way down to the mines themselves. Compliance with environmental standards and respect for human rights have absolute priority.

Ganfeng extracts lithium by mining so-called hard-rock deposits in Australia under the strictest sustainability standards.

′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. 

Open attitude

The BMW Group already publishes the countries of origin of the cobalt it uses on its website. 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 battery cell manufacturers CATL and Samsung SDI.

The BMW Group recently announced that it is increasing the order volume for battery cells from CATL to €7.3 billion (contract: 2020 to 2031) and also signed a long-term contract worth €2.9 billion with Samsung SDI for its fifth-generation electric drive trains.