German car manufacturers BMW Group is talking to suppliers amid concerns the key ingredient for battery production – cobalt – may soon run low.
Analysts fear the rising demand for electric vehicles will outstrip the available cobalt resources, according to Bloomberg’s New Energy Finance report.
Board Member Oliver Zipse told a media briefing that locating a reliable source of the rare metal is the “most important” question for BMW. This is because the supply of cobalt and other hard-to-obtain materials are key to the manufacturer’s development of energy-efficient automobiles.
“For all these elements we have a detailed strategy for the future that secures our volume need as well as the origin and the type of production, so that we can obtain it in good conscience,” Zipse said.
The solid grey metal is commonly produced as a by-product of copper and nickel mining and smelting and predominantly comes from Democratic Republic of the Congo (DCR), as well as the Central African Republic and Zambia. Just over half of the global cobalt supply is produced in DRC.
The news comes after BMW Group pledged to be more transparent about its battery cell supply chain last month. The manufacturers promised to release information on smelters (who sell materials to BMW suppliers) and the countries of origin for raw materials.
Ursula Mathar, head of Sustainability and Environmental Protection at the BMW Group said: “The BMW Group does not procure any cobalt itself; it only comes into contact with this raw material through the purchase of battery cells, for example.
“However, we are well aware that growing demand for electric vehicles also goes hand-in-hand with a responsibility for the extraction of relevant raw materials, such as cobalt. As a premium manufacturer – and in the interests of our customers – we aim to establish a transparent and sustainable supply chain that meets the highest standards.”
BMW is planning the first stages of a local model project in DRC to coincide with the publication of smelters and countries of origin next month.
BMW Group announced it will open a €200m new research centre for car battery technology at the beginning of 2019. Board members said the “interdisciplinary competence centre” aims to advance battery cell technology as part of developing “emission-free mobility”.
Novel battery-cell prototype production at the centre will improve battery performance, lifespan, safety and charging as well as bring costs down, the German manufacturing giant said. The plant will also create 200 new jobs as the company invest in the site in Munich, Bavaria over the next four years.