CATL to Supply Cylindrical Cells for BMW’s New Electric Vehicles

Chinese battery giant Contemporary Amperex Technology Co., Limited (CATL) will start supplying cylindrical cells to BMW from 2025 to power its new series of electric vehicles, Cailian Press reported on May 27, citing individuals familiar with the matter.

Previously, BMW planned to use cylindrical batteries in the models based on the Neue KlaSSe platform, which will be released in 2025, after Tesla announced the use of cylindrical batteries in its brand-new architecture.

CATL will supply BMW with cylindrical batteries instead of prism batteries. According to sources, this change will save BMW 30% in costs, due to the lower price of cylindrical batteries.

Generally, batteries account for four fifths of the price of battery packs, and the overall cost will decrease gradually as the technology matures. However, due to the recent record increase in the prices of raw materials such as lithium and nickel, battery costs continue to soar. BMW hopes to achieve the goal of bringing the profit margin of EVs equal to that of fuel vehicles by reducing battery costs.

Not long ago, CATL announced that its Kirin battery based on CTP3.0 will be launched. Compared with the 4680 columnar battery used by Tesla, the energy density can be increased by 13% under the same conditions. Higher battery performance may be one of the important reasons why BMW continues to choose CATL.

BMW is also one of the earliest automobile manufacturers to cooperate with CATL. As early as 2012, CATL, which had just been established, provided power battery system for BMW Brilliance’s first electric vehicle Zinoro 1E. In 2014, BMW cooperated with CATL on ternary lithium batteries. In 2019, BMW reached a new purchase agreement with CATL, with battery orders increasing from 4 billion euros ($4.30 billion) in 2018 to 7.3 billion euros ($7.84 billion), and the contract period from 2020 to 2031.

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Although CATL has cooperated with BMW for more than 10 years, its largest customer is Tesla. According to the financial report, CATL’s annual battery sales to Tesla total 13.04 billion yuan ($1.95 billion), accounting for 10% of its total annual sales and about 14% of its power battery system revenue.