BMW is switching to the next generation of low-cost batteries to take on Tesla moving forward.
The company is moving to round cells instead of prismatic ones for their next class of vehicles starting in 2025.
The change will allow BMW to drop the costs associated with their battery packs by around 30 per cent, as per company sources that spoke with Automotive News.
The reason for this is that battery cells make up about 80 per cent of the battery pack price. Round cells are cheaper and have improved efficiency over older prismatic cells.
Tesla made the switch to round cells many years ago for this exact reason.
BMW’s battery partners will produce the new round cells. Currently, the German automaker works with CATL, EVE Energy, Samsung SDI and Northvolt for their battery production. These producers have already produced round cells for other companies, so the switchover will not be a hurdle to overcome.
BMW believes that the expected 30 per cent price drop is taking rising raw material costs into the calculation. Currently, lithium and nickel are both experiencing spikes due to various factors.
BMW confirmed that the new batteries would first appear in their midsize premium segment. The first vehicle to feature the new cells should be the new fully electric BMW 3-series.