BMW open to sharing battery Technology

ULSAN, South Korea -- BMW is open to sharing with rival automakers the electric-vehicle battery cell technology it co-developed with Samsung SDI.

BMW purchasing boss Klaus Draeger said sharing the technology would reduce the cost of the battery cells -- the most expensive part of an EV.

"If Mercedes called us, we would be happy to find a way with Samsung SDI to supply them with battery cells," Draeger said.

BMW said it plans to increase battery cell orders from Samsung SDI, its exclusive supplier, by "at least" 20 to 30 percent in 2016 from the 2014 level.

The supply deal was part of an agreement the companies signed last week that also included co-development of a next generation of battery cells.

Samsung SDI will increase its supply for the BMW i3 battery-powered city car and i8 plug-in hybrid sports coupe and will supply batteries for future BMW hybrids starting with the X5 plug-in hybrid crossover, Draeger said.

BMW sold 5,396 i3s globally in the first half of the year. It said it raised i3 production to 100 a day in April and will increase output another 40 percent at the end of summer. The i8 is to go on sale in the United States next month.
Korean partner

BMW began work with Samsung SDI, a subsidiary of South Korea's largest conglomerate, Samsung, on lithium ion battery cells in 2009.

Samsung SDI supplies battery cells to Chrysler Group in the United States for the Fiat 500e EV and to Ferrari for the limited edition LaFerrari hybrid.

For Samsung SDI, which supplies batteries to Apple, the order builds on the company's plans to expand its automotive business. Its competitors include South Korea's LG Chem, which supplies Renault, and Panasonic, which supplies Tesla.

Lee Sang-hyun, an analyst at NH Investment & Securities, said the BMW deal will help SDI increase its presence as an EV battery maker in the United States and Europe, where it is less well known than other battery suppliers.

Last month, Tesla said it would make hundreds of its EV patents openly available to competitors. CEO Elon Musk wrote, "If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal."

Musk also cited environmental concerns: "Given that annual new vehicle production is approaching 100 million per year and the global fleet is approximately 2 billion cars, it is impossible for Tesla to build electric cars fast enough to address the carbon crisis."

According to Japanese research firm B3, the global market for automotive lithium ion batteries will increase to $21.3 billion in 2020 from $4.4 billion in 2014.

Samsung SDI builds 600,000 battery cells a month on two production lines in Ulsan. The company will add a third line by year end to boost monthly output to 900,000 battery cells. A battery normally takes up 30 to 40 percent of an EV's manufacturing cost, a Samsung SDI spokesman said.
Fuel cell option

At an event here to announce the deal, BMW's Draeger acknowledged that one of the challenges for battery electric cars is range anxiety, the fear that an EV will run out of power and strand occupants.

"This is why the whole industry is still looking very much at fuel cells because it is not clear what is also happening on the side of the electric infrastructure," he said, adding that BMW is also researching a fuel cell vehicle system.

BMW plans to further boost purchasing from South Korean suppliers from more than 300 million euros ($408 million) this year.

BMW uses battery cells produced by A123 in the United States for hybrid versions of its 3-series and 5-series sedans and for the outgoing X5 crossover hybrid.

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