BMW Group to invest $1.7 billion to build EVs in the US, partners Envision AESC for battery supply | The Financial Express

BMW Group to invest $1.7 billion to build EVs in the US, partners Envision AESC for battery supply

BMW Group has already announced that four additional battery cell factories will be built in Europe and China to meet its demand for next-generation battery cells.

BMW Group to invest $1.7 billion to build EVs in the US, partners Envision AESC for battery supply

German luxury vehicle maker BMW Group is accelerating its plans electromobility plan with a new investment in the United States to expand Plant Spartanburg and the company’s manufacturing footprint in the country.

Oliver Zipse, Chairman of the Board of Management, BMW Group has announced an investment of $1.7 billion (Rs 14,002 crore) investment in its U.S. operations, including $1 billion (Rs 8,237 crore) to prepare for the production of electric vehicles at the company’s existing US manufacturing facility in South Carolina, and $700 million (Rs 5,765 crore) to build a new high-voltage battery assembly facility in nearby Woodruff, SC. By 2030 BMW Group will build at least 6 fully electric models in the U.S.

BMW Group chairman Zipse was also announced an agreement to source next-generation lithium-ion battery cells from Envision AESC, which will build a new plant in the state.

“For decades, Plant Spartanburg has been a cornerstone of the global success of the BMW Group. The home of the BMW X models that are so popular all over the world. Going forward, it will also be a major driver for our electrification strategy, and we will produce at least six fully electric BMW X models here by 2030. That means: The ‘Home of the X’ is also becoming the ‘Home of the Battery Electric Vehicle’. In addition, we can showcase BMW Group’s ‘local for local’ principle: Our newly developed sixth generation battery cells, which were specifically designed for the next generation electric vehicles, will be sourced here in South Carolina – where X goes electric.”

In line with the principle of ‘local for local,’ the BMW Group aims to purchase battery cells for its electric vehicles where production takes place. The company has partnered Envision AESC, which will build a new battery cell factory in South Carolina, to supply Plant Spartanburg. Envision will produce newly developed round lithium-ion battery cells, which were specifically designed for the sixth generation of BMW eDrive technology and will be used in the next generation electric vehicles. The annual capacity of the battery cell factory will be up to 30 GWh.

The new battery format will increase energy density by more than 20 percent, improve charging speed by up to 30 percent and enhance range by up to 30 percent. At the same time, CO2 emissions from cell production will be reduced by up to 60 percent through the partial use of secondary lithium, cobalt and nickel material, as well as renewable energy for production. 

BMW Group has already announced that four additional battery cell factories will be built in Europe and China to meet its demand for next-generation battery cells. The cell factories are being built by partners and will each have an annual capacity of up to 20 GWh.

The BMW Group’s Spartanburg plant was established 30 years ago and began producing vehicles two years later. Since then, the OEM says the plant has become the global centre of competence for BMW Sports Activity Vehicles and a critical component of the company’s global production network. The plant currently represents an investment of nearly $12 billion (Rs 98,844 crore), employs more than 11,000, and has an annual capacity of up to 450,000 vehicles. To date more than six million BMW vehicles have been built in the U.S. – for the U.S. and global markets. Based on this strength, BMW has been the largest automotive exporter from the U.S. by value for the past eight years.

BMW Spartanburg plant

The Spartanburg plant currently produces 11 models including the BMW X3, X4, X5, X6 and X7 Sports Activity Vehicles, four BMW M models and two plug-in hybrid electric models. Production of the all-new hybrid-electric BMW XM will begin later this year.

The plant is supported by more than 300 suppliers in the U.S., including over 40 direct tier 1 suppliers in South Carolina alone.

Reducing carbon footprint

BMW Group has also set an initial target to reduce CO2 emissions by 40% per vehicle by 2030. As the Group works towards the goal of climate neutrality, the company is focused on the reduction of CO2 emissions throughout a vehicle’s entire life cycle. 

Design and Engineering: Beyond simply electrifying its product portfolio, BMW Group begins the design and engineering phase of vehicle development with a ‘secondary first’ approach, so that currently on average nearly 30 percent of materials used in BMW Group vehicles are recycled or reused. In the longer term, the ‘secondary first’ approach aims to increase this figure to 50 percent.

Supply Chain and Procurement: BMW Group has been actively involved for many years in initiatives to develop standards for responsible raw material extraction and promote compliance with environmental and social standards for raw material extraction through certification of mines. The cobalt and lithium used as raw materials for the new generation of BMW battery cells will be sourced from certified mines which allows the company retains full transparency over extraction methods and ensures responsible mining.

Vehicle Production: BMW Group’s global production network also relies on renewable energy such as solar, wind, and hydroelectric power in the manufacturing phase of its vehicles. All of the company’s production sites have been net CO2 neutral by offsets since 2021.

Vehicle Use Phase: BMW Group is also working to ensure that the electricity generated to charge battery electric vehicles is done so sustainably. For example, partnerships with dairy farms in California reduce greenhouse gas emissions by capturing methane gas and transforming it into renewable energy, which is exported to the power grid. The company also operates a pilot program called ChargeForward in the San Francisco Bay Area which makes it possible for owners to charge their vehicles with as much solar energy as possible.

Vehicle Recycling & Post-Life: From the start BMW Group vehicles are designed with recycling in mind, thereby improving the possibility for components to be recycled or reused. The company has already demonstrated the ability to recover more than 90% of the material from high-voltage batteries and has approximately 3,000 collection points worldwide for the recycling of end-of-life vehicles.

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First published on: 20-10-2022 at 17:17 IST