BMW plans to focus on efficient design and recycling to lower battery costs. The automaker’s finance chief noted that the company would not focus on investing in mines. This strategy sets BMW apart from competitors who are focusing more on the supply chain to lower these costs.
BMW’s plans to lower battery costs
The Chief Financial Officer at the company, Nicolas Peter, commented on this development saying that it was not the ideal time to invest in mines. The finance chief noted that the company wanted to pay more attention to recycling raw materials from cars and other products.
Peter is scheduled to retire in May this year. He said the automaker reported solid financial results in the first three months of 2023. The executive further said that there were zero reasons to doubt the company’s ability to achieve the forecast set earlier this month.
BMW has a battery cell research center situated in Germany. However, Peter noted that the automaker had tasked its partners with large-scale development. Through this initiative, BMW has placed multibillion-euro orders with EVE Energy and CATL to manufacture battery cells in China and Europe.
A high percentage of battery costs go towards acquiring raw materials. Automakers looking to maximize profitability from electric vehicles usually face the challenge of high battery costs. However, BMW plans to make profits from its “Neue Klasse” EV line to reach those of combustion engine cars.
Competing carmakers such as Volkswagen are investing in expanding their battery production and investing in mines to give them some control over the supply chain. Mercedes also recently said that it was allocating more capital to mining and launched a raw materials office in Canada.
Focus on demand and recycling
BMW’s approach is unique as the carmaker will focus on boosting demand through car production. The firm will also rely on partners with more expertise in building the large-scale infrastructure needed for electrification.
Peter added that BMW would take a unique approach to recycling. The carmaker has a battery cell recycling facility through its joint venture in China. Therefore, it will not create large cell recycling facilities for its needs.
BMW will prove the demand for recycled raw materials using the sales growth of its electric vehicles. The company will also secure partnership deals to help it recycle on a large scale. He added that the company’s business development would motivate the firm to invest and did not need large recycling facilities or battery cells to operate.
BMW will also reduce costs by investing in technologies that need lesser raw materials, such as hydrogen-powered cars. BMW is the only German automaker looking to manufacture a hydrogen-powered passenger vehicle.
BMW’s chief executive officer, Oliver Zipse, noted that the commercial production for hydrogen-powered passenger vehicles could start in the second half of the current decade. However, the timeline would be determined by the ability of other industries to provide a hydrogen charging network.