BMW cautious about bringing batteries in-house despite rising sales

A BMW logo is seen outside a BMW car dealership, amid the coronavirus disease (COVID-19) outbreak in Brussels, Belgium May 28, 2020. REUTERS/Yves Herman

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BERLIN, Jan 13 (Reuters) – BMW will not increase its own production of battery cells for electric cars until the technology is further developed, the German company said on Thursday, taking a more cautious approach than some rivals despite the brand’s record sales in 2021. .

The automaker, which was also optimistic about hitting the upper end of its 9.5% to 10.5% profit margin estimate for 2021, is currently buying battery cells from CATL (300750.SZ) , Samsung (006400.KS) and Northvolt, among others, but is building its own pilot plant.

“We have secured our needs for the next few years very well with the partners we have,” chief financial officer Nicolas Peter told Reuters, adding that BMW would not be rushing to increase its own cell production.

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“We’re not at the point yet where we can say what technology will be with us for the next 10 to 15 years,” he said. “That’s why it’s important to invest a lot of resources with global partners in battery cell development.”

Works council chief Manfred Schoch has pushed BMW to increase battery production to secure supplies and create jobs.

German rivals Volkswagen (VOWG_p.DE) and Daimler (DAIGn.DE) both have direct stakes in battery cell makers.

Daimler, which owns 33% of Automotive Cells Company, said in July it planned to build eight gigafactories to manufacture battery cells with partners.

Volkswagen plans to build six cell factories in Europe by the end of the decade with partners including China’s Gotion High-Tech (002074.SZ) and Northvolt, in which it has a 20% stake.

BMW is working to build battery assembly sites at each plant, but will rely on cell partners, Peter said.


Shares of BMW hit a new six-year high of 99.3 euros after Reuters reported Peter’s comments, falling back to 98.9 shortly after, still slightly above the day’s open at 97.7.

The automaker overtook Daimler for the first time in five years as the premium automaker with the most vehicles sold in 2021, delivering 2.21 million vehicles compared to Daimler’s 2.05 million. Read more

Daimler CEO Ola Kaellenius said high deliveries were not the priority under his leadership, preferring to raise prices and boost margins rather than maximizing the number of vehicles sold.

BMW, which has kept output high amid global chip shortages in part because of its close ties to suppliers, is slightly more cautious about margins than rivals including Volkswagen’s Daimler and Audi, which expects at a margin of 9 to 11% for 2021.

Still, Peter said the transition to electric vehicles is moving faster than BMW expected two or three years ago, with sales more than doubling in the past year and order books fuller than never.

BMW, which made an early entry into electric vehicles but whose portfolio now lags behind some rivals, plans to add an extra Saturday shift at its Munich plant from April to meet the request, a spokesperson said.

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Reporting by Victoria Waldersee and Christina Amann Editing by Edmund Blair and Mark Potter

Our standards: The Thomson Reuters Trust Principles.

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