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BMW inks USD 4.7 bln deal with China EV batteries supplier
2018/07/10 02:21:49

Jul 10, 2018 (China Knowledge) - German carmaker BMW has reached a purchase agreement with China's leading electric vehicles (EV) batteries supplier, Contemporary Amperex Technology Ltd (CATL) on Monday and will purchase about 4 billion euros (USD 4.7 billion) of batteries from CATL in the next few years.

The contract amount this time is significantly higher than the 1 billion euros order announced last month.

BMW head of purchases, Markus Duesmann revealed that the procurement contract includes two major parts, of which about 2.5 billion euros will come from CATL’s China factory, while the other 1.5 billion euros of orders will be produced by CATL's new lithium battery plant in Thuringia, Germany. 

The world's largest supplier of EV batteries signed an investment agreement with Thuringian State government during China’s Premier Li Keqiang visit to Germany. According to the agreement, CATL will invest EUR 240 million (about RMB 1.87 billion) to set up a battery production base and intelligent manufacturing technology research and development center in Erfurt, largest city and the capital of the state of Thuringia, central Germany.

The plan is to put the battery production base, which will be mainly engaged in the research and development and production of lithium-ion batteries, into operation in 2021, and form 14 GWh of production capacity after 2022, which is expected to provide about 600 jobs for the local population. The products manufactured will be supplied to renowned global car companies such as BMW, Volkswagen, Daimler, Jaguar Land Rover and PSA.

Robin Zeng, the chairman of CATL said, "We chose Germany as our first investment location in Europe. We hope to bring the world's most advanced power battery technology to Germany. By forming a localized power battery supply capacity in Europe, we can get closer to European customers, provide more timely and effective product solutions and better respond to customer needs."

Duesmann added that BMW has invested in the new factory in Thuringia, Germany but did not reveal the specific amount. And, BMW has also put money into battery research but has yet to decide whether it will produce its own batteries in the future.

This is not the first time that the CATL, the world's largest supplier of EV batteries, has won orders from a large European car manufacturer. Previously, Daimler (Mercedes-Benz's parent company) and Volkswagen group (Audi's parent company) have reached cooperation with CATL.

Founded in 2011, CATL is headquartered in Ningde, Fujian Province. The company focuses on the research, development, production and sales of new energy vehicle power battery systems and energy storage systems.

Ever since CATL was listed on the China's growth enterprise market (GEM) on June 11 last month, its share price jumped by more than 180% from its issue price of RMB 25.14, as of yesterday's closing price RMB 71.55.

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