As the electric vehicle boom continues and demand scorches for batteries, luxury auto maker BMW AG has placed an order up to $24 billon.
The German company has increased orders for battery cells to keep pace with accelerating demand for electric cars that made up more than 11% of deliveries during the half of the year.
BMW now has contracts for more than 20 billion euros ($23.8 billion) of batteries, up from 12 billion euros previously, Chief Executive Officer Oliver Zipse said in an interview.
The cells are meant for the company’s i4 sedans, iX sport utility vehicles and other models BMW is producing through 2024. The company plans to start switching to a new generation of batteries the following year.
“We’re following the market,” Zipse added. “The first half has shown that we’re growing and gaining market share. We’re right in the middle of electrification.”
Carmakers have been faced with major shortage issues for semiconductors and access to battery cells and raw materials will be critical for companies shifting to EV.
BMW’s increased cell orders are spread across China’s Contemporary Amperex Technology Co. Ltd. and EVE Energy Co., South Korea’s Samsung SDI Co. and Sweden’s Northvolt AB.
Last month the company had predicted the situation would worsen through the end of the year regarding the semiconductor shortage.
“We said some weeks ago that the second half would be more difficult, and that’s what we’re seeing now,” Zipse said. “It’s more difficult and the problem is here to stay for many months.”
Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.