Detroit Is Mum While Apple, BMW Line Up Battery Metal Supplies
Detroit Is Mum While Apple, BMW Line Up Battery Metal Supplies
(Bloomberg) -- As Apple Inc. and BMW AG take unprecedented steps to arrange supply of metals used in batteries that power iPhones and electric cars, Detroit’s automakers have been relatively quiet.
While General Motors Co. and Ford Motor Co. have made full-throated declarations recently that that they’ll electrify their lineups, neither has offered details on whether they’re lining up sources for cobalt and lithium that’ll be key to delivering on those promises. That stands in stark contrast to BMW, which went public with its procurement plans late last year.
“The need to secure large quantities of batteries in the long term may force automakers to move further up the supply chain and invest even in raw materials production,” Logan Goldie-Scot, a Bloomberg New Energy Finance analyst, wrote in a report last month. “Much of their focus will be on securing raw materials in the early to mid-2020s to ensure that they have sufficient supply to support the significant investment they will have made.”
Ford is going “all in” on electrified vehicles, Executive Chairman Bill Ford said in January as the automaker pledged to spend $11 billion bringing out 40 models to market by 2022. A couple months earlier, GM Chief Executive Officer Mary Barra forecast that the company would be selling 1 million battery-powered cars like the Chevrolet Bolt annually by 2026.
BMW has 12 battery-powered models planned by 2025 and sees a 10-fold jump in its need for raw materials including cobalt and lithium during that span. The company has been negotiating five- and 10-year purchasing contracts to ensure it’ll have enough.
“We’ve been intensively focusing on how to manage future cobalt supply for about a year now,” Markus Duesmann, a BMW purchasing executive, said in December. “Before, it wasn’t clear just how quickly demand will accelerate.”
Volkswagen AG invited producers and traders of cobalt for talks at its German headquarters in November as part of its hunt for long-term supplies of battery metals, people familiar with the matter said at the time. Toyota Motor Corp.’s trading affiliate said last month it was buying a stake in an Australian lithium miner that’s expanding capacity.
Arranging supplies of cobalt, in particular, has been a hot-button issue for some companies reliant on batteries because prices have been soaring.
GM has been engineering its battery packs to use less of the metal, Pam Fletcher, GM’s vice president of global electric vehicle programs, told reporters in January.
“We can see a wide swing in cobalt prices and have a negligible impact,” Fletcher said. GM spokesmen didn’t return calls and emails seeking comment Wednesday on the company’s plans for securing supply of metals for vehicle batteries.
A Ford spokesman declined to comment, citing the company’s policy to avoid discussing the details of its raw materials sourcing.
--With assistance from Christoph Rauwald Elisabeth Behrmann and Anne Riley Moffat
To contact the reporters on this story: David Welch in Southfield at dwelch12@bloomberg.net, Keith Naughton in Southfield, Michigan at knaughton3@bloomberg.net.
To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Anne Riley Moffat
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