BMW splits sixth-gen battery cell supply between Samsung SDI and LG

BMW has signed Samsung SDI and LG Energy Solution to supply cells for its sixth-generation high-voltage batteries, splitting the work by region: LG covers North America, Samsung SDI covers Europe, with supplies beginning in the late 2020s.

The deal matters for freight watchers because it locks in inbound flows to two of the most heavily localized cell footprints in the auto industry. LG Energy Solution will feed BMW electric vehicles built in North America; Samsung SDI will supply EVs manufactured in Europe. That division mirrors where BMW has spent its billions — and where it wants tonnage moved short distances rather than shipped intercontinentally.

"Our global partner network with leading cell manufacturers ensures that we have a resilient, flexible and competitive battery cell supply," said Hendrik Lang, head of purchasing and quality of high-voltage batteries at BMW, in a statement.

What does this change for BMW's supply chain?

Shorter distances, mostly. BMW has built five high-voltage battery manufacturing facilities near its vehicle plants, and it wants cell production sitting close to them. The five sites:

• Irlbach-Straßkirchen, Lower Bavaria
• Debrecen, Hungary
• Shenyang, China
• Woodruff, South Carolina
• San Luis Potosí, Mexico

Lang argues that regional infrastructure near existing facilities secures jobs, and that cutting the geographic distance between suppliers, battery plants and assembly lines makes the automaker more competitive. In plain terms: fewer ocean legs, less exposure to long-haul disruption, faster response when demand shifts.

The Samsung SDI deal is not BMW's only European bet on cells. The automaker previously signed supply agreements with two China-based battery makers, CATL and EVE Energy, for the region. So Europe now runs on a three-supplier base — Samsung SDI from the late 2020s, CATL and EVE Energy alongside.

"Diversifying procurement is an integral part of the BMW Group's purchasing strategy. We aim to ensure our products' global competitiveness and to be successful in different markets," said Nicolai Martin, member of BMW's board of management responsible for purchasing and supplier network. "To achieve this, we operate as locally as possible in our value chains, leveraging the potential of our global procurement markets."

Why localization, and why now?

BMW calls the timing of these partnerships a key success factor. Building a localized battery supply chain demands significant investment, the automaker said, and it depends on global technology companies agreeing to set up local operations near BMW's manufacturing footprint. A favorable regulatory climate is also necessary, per the release.

That last point is doing quiet work. Cell makers don't move plants across borders for free, and BMW is effectively saying policy support — subsidies, incentives, permitting — decides whether localization pencils out. It's a caution as much as a boast.

Beyond buying cells, BMW has built in-house expertise across three German facilities covering development, production and recycling:

• The Battery Cell Competence Center in Munich, exploring future cell technologies
• The Cell Manufacturing Competence Center in Parsdorf, Upper Bavaria, studying how future cells can be produced with higher quality and maximum efficiency
• The new Cell Recycling Competence Center in Salching, recovering raw materials through a BMW-developed recycling concept for use in new batteries

"Our competence centers enable us to actively shape technological developments and meet our partners on an equal footing," Lang said. The subtext: BMW wants to negotiate with CATL, Samsung SDI and LG as a knowledgeable buyer, not a dependent one.

The investment behind the cells

The supply deals sit on top of a heavy capital cycle. In February, BMW announced roughly €650 million ($760 million) in facility upgrades at Plant Munich to build electric vehicles on its updated Neue Klasse platform. Internal combustion vehicle production at the plant ends by late 2027; after that, the factory builds EVs only.

Over the summer, BMW completed a $1.7 billion investment project at Plant Spartanburg in South Carolina — expanding the factory and funding construction of the Woodruff EV battery plant to support expanded US electric vehicle production.

The product side is moving too. Earlier this year BMW launched the electric iX3 SUV, which uses a new battery design built on cylindrical cells with 20% higher energy density and an 800-volt electrical system. Executives said on the Q1 earnings call that future Neue Klasse platform vehicles will be a key driver of the company's growth.

The forward view

For shippers and forwarders serving the auto sector, the signal is clear: BMW is engineering regional inbound networks around five battery hubs on three continents, and the Samsung SDI and LG agreements hard-wire those lanes from the late 2020s. Expect cell, precursor and equipment flows to concentrate near Debrecen, Woodruff, San Luis Potosí, Shenyang and Lower Bavaria — with recycling loops, like Salching's, gradually pulling end-of-life batteries back into the same regional circles.