CATL will be supplying BMW with cylindrical lithium-ion battery cells for electric vehicles, starting from 2025.

This interesting news was announced by CATL (via Reuters), which has confirmed the signing of an agreement with BMW, but without elaborating on it. We guess that details will be announced later by BMW itself.

"Chinese battery giant CATL on Friday said it will start supplying cylindrical cells to BMW from 2025 to power its new series of electric vehicles.

The battery maker has signed an agreement with BMW in which it is nominated as the supplier of the cylindrical cells for the German carmaker..."

Nonetheless, it's pretty surprising considering that the German manufacturer so far was relying on prismatic cell format and that it's also the main type produced by CATL.

If the switch from the prismatic to cylindrical cell format at scale is true, then there must be a serious reason behind it.

Earlier this month, we heard a rumor that BMW is going to use cylindrical battery cells in its next-generation platform “Neue Klasse”, as this type of battery has the potential to lower battery system cost by as much as 30% (compared to prismatic format). Bloomberg's report at the time was based on unofficial input from "people familiar with the plans."

The list of BMW Group's battery cell suppliers includes Samsung SDI, CATL, as well as EVE Energy and Northvolt. According to the rumor, BMW would like to source cylindrical battery cells from existing partners.

The word "cylindrical" is crucial but does not say what exact format is on the table. Tesla recently launched in-house production of the 4680-type cylindrical cell, which is a step up from the 2170-type and previous 1865-type.

BloombergNEF notes that in 2021, carmakers paid an average $118 per kWh of battery, on the pack level, and the battery cells typically make up four-fifths of the price of a battery system cost.

Due to a substantial increase in battery materials costs, manufacturers are looking at how to bring the costs down. The Bloomberg report suggests that the switch to the cylindrical cell format would help to lower costs. Well, only time will tell, but Tesla's high operating margins might be another indicator of that.

Got a tip for us? Email: