BMW Localizes Battery Cells With Samsung SDI and LG

BMW Group said on November 9 that it has contracted two additional suppliers of cells for its sixth-generation high-voltage batteries: Samsung SDI in Europe and LG Energy Solution in the United States. In a Munich press release, the automaker said the two manufacturers will supply cells from their established plants in those regions beginning in the late 2020s.

The company described the nominations as part of a “local for local” purchasing approach, under which it buys components close to vehicle production wherever possible. BMW said that approach is meant to strengthen regional value creation in Europe, Asia, and North America, shorten transport distances, and increase supply security, while a diversified global supplier network supports resilience and flexibility.

“Diversifying procurement is an integral part of the BMW Group’s purchasing strategy,” Nicolai Martin, member of the Board of Management of BMW AG responsible for Purchasing and Supplier Network, said in the release. “We aim to ensure our products’ global competitiveness and to be successful in different markets. To achieve this, we operate as locally as possible in our value chains, leveraging the potential of our global procurement markets. Through our battery cell partnerships, we are actively strengthening value creation in Europe and the US.”

With the new nominations, BMW said it will source battery cells produced in Europe from CATL, EVE Energy, and Samsung SDI going forward, and that LG Energy Solution will also supply the company in the United States. Hendrik Lang, head of purchasing and quality of high-voltage batteries at BMW AG, said, “Our global partner network with leading cell manufacturers ensures that we have a resilient, flexible and competitive battery cell supply.”

The same “local for local” idea, BMW said, extends to assembly of the sixth-generation batteries at five new production facilities built close to vehicle plants: Irlbach-Straßkirchen in Lower Bavaria, Debrecen in Hungary, Shenyang in China, Woodruff in the United States, and San Luis Potosí in Mexico. The company said those sites keep the distances between suppliers, battery plants, and vehicle plants short.

BMW did not disclose contract values, volumes, or a more specific start date than the late 2020s. The release also did not name LG Energy Solution’s existing U.S. plants or Samsung SDI’s European plants that will fill the new contracts. Those details are therefore not known from the announcement itself.

The automaker said competitive localization of battery-cell production is a long process that requires investment, local industrial conditions, and what it called feasible political regulations for the industrialization period. It also pointed to in-house battery work in Bavaria, including a Battery Cell Competence Center in Munich, a Cell Manufacturing Competence Center in Parsdorf, and a Cell Recycling Competence Center in Salching, where it said raw materials are to be recovered through a direct-recycling method whose intellectual property BMW owns.

What it means for manufacturers

Most midsize manufacturers are not sourcing EV battery cells. The useful part of BMW’s announcement is the purchasing logic: name more than one qualified supplier, place those suppliers in the same region as the plant they feed, and treat localization as a multi-year project rather than a single purchase order. That logic applies to any long-lead, high-value component that is hard to air-freight or hard to replace on short notice.

A practical next step is to pick the five or ten purchased parts that would stop a line first, write down the country and region of the incumbent source, and ask whether a qualified second source already exists in the same region as your plant. If it does not, the gap is a sourcing project, not a line on a risk register. Our guides on supplier diversification and single-source supplier risk show how to rank that work, and AI for purchasing and procurement covers how planning data can support it.

Questions about dual-sourcing or regionalizing a purchased-parts list?