The BMW Group adheres to the local for local ethos within its global supplier network, meaning it procures components as close as possible to the place of vehicle manufacturing. Targeted localization of supply chains boosts value creation in the most strategic regions of Europe and Asia as well as North America, minimizes transportation distances, and enhances security of supply. The global supplier network also provides durability along with versatility.
More localization of battery cell production
It is well to be noted that the high-voltage battery is an important part of the global supply chain and production system. It is an essential component of the electric car and affects important characteristics like range and charging performance. The BMW Group procures the cells for the high-voltage batteries from renowned cell manufacturers all over the world, integrating regional supply chains alongside a globally diverse supplier network. The BMW Group has now signed up further cell suppliers when it comes to its sixth generation – Gen6 high-voltage batteries – LG Energy Solution in the US and Samsung SDI in Europe. The two battery cell manufacturers will supply the BMW Group from the end of the 2020s onwards from their existing plants in the respective areas. “Local for Local” is the combination of regional value creation and a global network of top technology partners. This is why the BMW Group is counting on an extensive supplier lineup with localized cell production within close geographical proximity to its high-voltage battery as well as vehicle manufacturing plants.
Nicolai Martin, the Member of the Board of Management of the BMW AG Purchasing and Supplier Network, says diversifying purchases is an important part of the BMW Group’s buying strategy. They want to be competitive in the world and they intend to do well in different markets. To this end, they act as locally as possible within their value chains and exploit the potential of their global procurement marketplaces. They are in a way actively driving value creation in Europe and the US by means of their battery cell collaborations.
A global purchasing approach strengthens resilience and a competitive edge
The BMW Group will procure battery cells manufactured in Europe from CATL and EVE Energy as well as Samsung SDI with the latest nominations. In the near future, LG Energy Solution will additionally supply the BMW Group in the USA. Adds Head of Purchasing and Quality of High-Voltage Batteries at BMW AG, Hendrik Lang, “Our global partner network with leading cell manufacturers ensures that we have a resilient, flexible, and competitive battery cell supply.”
Apparently, the “local for local” principle applies to both the supplier network and the assembly of Gen6 high-voltage batteries. The batteries will be manufactured at 5 new production sites around the world that the BMW Group decided to set in close proximity to its vehicle plants – Irlbach-Straßkirchen in Lower Bavaria, Debrecen in Hungary, Shenyang in China, Woodruff in the USA, and San Luis Potosí in Mexico. It helps create jobs and enhances regional infrastructure along with current facilities. The distance from the suppliers to the battery and vehicle plants is still short.
Supply chain localization: The key factors for success are time and partnerships
The competitive targeted localization of supply chains for industrial value creation is a very complex process, especially when one talks of battery cell production. A lot of investment is needed, along with the development of effective supply chains with global technology leaders in addition to their willingness to set up shop onsite. The BMW Group is committed to the sustainable development of fully integrated regional battery ecosystems. This calls for attractive local conditions and possible political regulations for appropriate periods of industrialization.
Battery Cell Competence Centers in Bavaria – Highly regarded internal expertise
Alongside its broad supplier network, the BMW Group also possesses extensive in-house know-how as far as the development, production, and also reuse of battery cells go.
Lang opines that their competence centers allow them to actively impact advances in technology and engage their partners on a level playing field. The BMW Group is researching new cell technologies for future high-voltage batteries at the Battery Cell Competence Center – BCCC located in Munich. At Parsdorf, the Cell Manufacturing Competence Center – CMCC delves deep into how these battery cells can be manufactured with the best possible quality and optimal resource utilization. The near-series battery cells are also manufactured as well as tested there. At the new Cell Recycling Competence Center – CRCC located in Salching, the BMW Group’s novel direct recycling concept is applied to retrieve high-value raw materials and feed them back into the production method. The intellectual property for the recycling method belongs to the BMW Group, and Encory GmbH is responsible for the construction and operation of the Competence Center.
