Lithium next German power play?
BMW, Daimler and Volkswagen came together to acquire Nokia's HERE high-definition mapping unit in 2015, and they combined efforts when deciding to build an ultrafast charging network for electric vehicles in Europe.
So will the German companies join forces to secure a sufficient supply of lithium, a crucial raw material for battery-electric vehicles and plug-in hybrids?
BMW, for one, seems willing.
Krueger:"There's enough competition."
"That's a point that is worth considering," BMW CEO Harald Krueger told reporters at the Geneva auto show this month.
Part of the problem for carmakers stems from the high concentration of lithium suppliers.
The material is overwhelmingly sourced from South America and mined by four companies: Chile's SQM; China's Tianqi Lithium and Albemarle; and FMC Lithium based in the U.S.
Should carmakers consider joining forces to source lithium, Krueger said he did not believe cartel authorities would prevent it.
"There's enough competition out there," he said, noting the HERE purchase was greenlighted and antitrust officials were unlikely to block cooperation on the charging network.
Automakers such as BMW need to secure a sufficient supply of lithium because it it is an important raw material for the batteries that power full-electric vehicles and plug-in hybrids. BMW plans to sell 100,000 electrified models this year after delivering 62,000 battery-electric and plug-in hybrid vehicles to customers in 2016. That number is expected to rise fast as emissions rules get tougher in Europe and other parts of the world.
Much as BMW believes it can only succeed in autonomous driving when it doesn’t have to depend on cloud-based digital maps, Krueger believes that BMW cannot be dependent on rare earth materials such as neodymium to provide zero-emissions driving.
“We’re looking to avoid rare earths in the future generations of electric motors,” he said.
In comparison with the competition, BMW decided in favor of a high vertical integration when it comes to manufacturing electric motors.
You can reach Christiaan Hetzner at email@example.com.