Bigger Bet on EVs
BMW initially appeared rather conservative in electric car development. But, as it turns out, the company was simply biding its time and didn’t rush its development amidst the rush of EVs that came out in the early 2020s. One could say it was doing a lot of work behind the scenes to give us a new generation of EVs that have all the potential to be relevant for a long time.
So far, playing the long game has worked out for BMW. The iX3 received praise in first-drive impressions, bagged World Car of the Year, and is doing pretty well for itself in Europe so far. The i3 is also showing promising signs with loads of reservations that forced BMW to open up the order books earlier than planned. A good problem, then.
BMW
Keeping Costs Steady
BMW will be adding more ‘i’ models down the line. There’s the iX7, the facelifted i5, and the first-ever i1, just to name a few. As BMW builds more of these, economies of scale should work in the company’s favor, allowing it to produce EVs at an even more competitive rate. But aside from that, the company is also actively finding more ways to keep its battery-powered vehicles competitively priced.
Recently, BMW is taking added measures to enhance its battery supply chain. It’s applying a “local for local” principle, wherein it’s targeting localization in Europe, Asia, and North America.
BMW
Strengthened Partnerships
There are two key advantages to doing this. First of all, it reduces transport distances, and additional transport costs could easily be avoided by building up local sources. Secondly, it increases supply security, meaning production shortages should be less of an issue should demand spike.
BMW has partnered with Samsung SDI in Europe and LG Energy Solution in the U.S. Both will supply sixth-generation high-voltage batteries for the Neue Klasse models. By the looks of things, all European-built models will get Samsung SDI-made packs, while the U.S-built SUVs will utilize batteries from LG Energy Solution. With that, we can expect models like the iX5 and future iX7 to get such batteries.
BMW
The Plants
It was in 2022 when BMW announced its plan to build a battery plant in Woodruff, and it’s expected to open by the end of the year. That plant will benefit from the ‘local for local’ initiative put forward by the brand. It won’t be the only North American plant that will be covered by the plan, as the San Luis Potosi plant in Mexico will also build these batteries. Over in Europe, plants in Irlbach-Strasskirchen (Lower Bavaria), and the AI-powered and run Debrecen facility in Hungary will be major battery assembly hub. As for Asia, it will be the Shenyang plant in China.
Automakers are racing to push a new wave of electrified and electric vehicles at record pace, all while faced with the challenge of keeping costs within reason. Legacy automakers are also fighting the influx of Chinese automakers that have entered key markets, and by keeping costs lower, it should help these companies retain their competitiveness and, more importantly, relevance.
BMW
