The regional supply chain for battery materials is being expanded in North America. Suppliers, producers, and purchasers should be located as close as possible to each other for an efficient output.
Save CO2-emissions, avert logistical disruptions, and mitigate geopolitical unrest: The ‘local for local’ approach aims to achieve these targets as a pillar of the BMW Group production and supply chain strategy. The focus of "local for local" lies on following the market with production and selecting suppliers as close to production as possible. Now, a new partner will strengthen the battery cell supply chain in North America.
The Belgian company Umicore will provide our battery cell supplier AESC in South Carolina with cathode active battery material from their new plant in Ontario, Canada. In the course of regionalising all processes, the BMW Group has reached an agreement with AESC which states that after an initial phase they will exclusively obtain their cathode active materials from Umicore in Canada. This is an important step towards strengthening the regional supply chains of the BMW Group and securing the ramp-up of electromobility. Keep in mind, already in 2030, at least half of all newly sold cars of the BMW Group are predicted to be fully electric.
Short routes mean more efficiency and resilience
Umicore uses state of the art production technology: As the first of its kind in North America, the plant close to the US-border combines cathode and precursor materials manufacturing at a large industrial scale. At the BMW Group we take care to ensure that all our suppliers and partners comply with our high environmental and social standards. This is a given here in Ontario. The plant, in the center of Canada’s automotive eco-system, offers access to a highly skilled workforce, key infrastructure and renewable energy, which the new plant will be running on 100% from start of production. Umicore has pledged to reach net-zero CO2-emissions by 2035 as well as establish a responsible supply chain for battery cells from the mine right to the plant.
“The BMW Group pursues a globally balanced procurement strategy in the three main geographical regions of the world”, says Joachim Post, Member of the Board of Management of BMW AG, Purchasing and Supplier Network. Currently, we have five battery cell factories under contract with various partners and assembly plants for the BMW Group’s sixth generation of high-voltage batteries are being built in Debrecen (Hungary), Woodruff near Spartanburg (USA), San Luis Potosí (Mexico) as well as Shenyang (China). Furthermore, an assembly plant for high-voltage batteries is planned on the lower Bavarian townlands of Irlbach-Strasskirchen which will supply the vehicle production plants in Munich, Dingolfing and Regensburg. This local approach will secure high-voltage battery production during unforeseen political and economic events. And shorter distances reduce the carbon footprint in vehicle production.
Comprehensive investment in “local for local”
“We are pleased that Canada is playing a strong role in establishing a robust and efficient battery cell supply chain for the BMW Group in North America”, says Joachim Post. Back in October 2022, the Chairman of the Board of Management of BMW AG Oliver Zipse had already announced comprehensive investments amounting to 1.7 billion US-Dollar for the expansion of the plant in Spartanburg. This included 700 million US-Dollar for the construction of the future BMW Group assembly center for high-voltage batteries for the fully electric BMW X-series in Woodruff, South Carolina. In the initial phase, it will encompass 93,000 square meters and will produce battery modules of the sixth generation. The assembly center will create about 300 new jobs. The plant will be an important hub in an integrated, localised supply chain for electric vehicle production.