To secure its piece of the EV pie
With more and more car manufacturers committing to an all-electric future, the race for materials and supplies are heating up, and to make matters worse, the automotive industry is currently facing a serious semiconductor chip shortage. BMW, which recently launched a new range of all-electric vehicles, including the BMW iX and i4 plans to cut production costs by as much as 25 percent in the coming years to combat losses caused by supply issues, and has now announced a massive $24 billion investment in batteries to keep up with demand. BMW's EV sales have made major strides in the past two years, and now accounts for more than 11 percent of deliveries during the first half of 2021.
According to a recent interview with Bloomberg, BMW has upped its investment in batteries and associated technology to $23.8 billion. BMW chief executive officer Oliver Zipse says that the large investment will secure batteries for current BMW products such as the i4 Sedan and iX SUV, but will also go toward powering upcoming models through 2024, after which BMW plans to switch to more efficient batteries.
"We're following the market. The first half has shown that we're growing and gaining market share. We're right in the middle of electrification," Zipse said. This massive investment comes as no shock, as companies such as Tesla have gone as far as to sign supply deals with mining companies in order to secure a supply of cobalt and nickel.
So where is all of BMW's money going? The majority of the nearly $24 billion will be heading to China, and more specifically China's Contemporary Amperex Technology Co. Ltd. and EVE Energy Co.
Samsung will also enjoy a big chunk of that investment, as will Northvolt AB from Sweden. Both Chinese companies enjoyed a 6.5 percent surge in their stock prices after the announcement.