Chinese battery giant CATL is reportedly gearing up to begin supplying BMW with cylindrical battery cells from 2025 for its upcoming Neue Klasse range of electric vehicles (EVs).
According to a report from Automotive News Europe, CATL has signed an agreement with BMW in which it is nominated as the supplier of the cylindrical cells for the German automaker.
CATL didn’t elaborate any further and BMW declined to comment to the publication.
BMW is reportedly planning to use these round battery cells instead of typical prismatic ones because it wants to cut costs.
People familiar with the matter previously told Bloomberg that this change to cylindrical battery cells would deliver a 30 per cent drop in costs.
Battery cells are reportedly said to make up four-fifths of the price of a battery pack, and improving the technology and efficiency have typically delivered annual cost reductions.
This round CATL battery cell will go head-to-head with Tesla’s 4680 cylindrical lithium-ion battery cells, which are going to be produced by Panasonic and measure 46mm in diameter and 80mm long.
Panasonic recently announced it plans to speed up the development of the new 4680 battery cells and will build two production lines at its Wakayama plant in western Japan, starting production in early 2024.
Although this deal between CATL and BMW may seem new, the Chinese giant has been supplying the German automaker will batteries for a decade. BMW also buys batteries from EVE Energy, Samsung SDI and Northvolt.
The new 3 Series-sized EV will be built at a new factory being constructed in Debrecen, Hungary.
“When it hits the market, it will be concentrated on the 3 Series segment and at that point in time the market will have developed into a size where it is reasonable to have only one drivetrain in that architecture,” said BMW CEO Oliver Zipse to Automotive News and other outlets during an earnings call.
According to Zipse, Neue Klasse will feature a “quantum leap in technology”, including next-generation electric drivetrains “with more output, new cell chemistry and new cell formats”.
Unlike some other automakers, BMW has yet to make any announcements about when it will end development and production of internal combustion engine vehicles.
The automaker’s latest plan calls for it to produce a total of two million all-electric cars by 2025. By 2030, the company expects half of its annual global sales to be EVs.