BMW’s China Electric Vehicles Cast Spotlight on High-Density Battery Costs, Safety

BMW AG’s decision to use high-density batteries from China’s largest manufacturer in its new iX3 model electric cars has cast a spotlight on the technology’s safety and the delicate balance between longer battery life and costs.

The “811” batteries from Fujian-based Contemporary Amperex Technology Co. Ltd. (CATL), which will power iX3 models made in China, come with high energy density cathodes made of nickel, cobalt and manganese at an 8:1:1 ratio. Such batteries can ensure a longer driving range, but have raised concerns in the industry over their stability given their high-energy density nature.

BMW isn’t the first automaker to use 811 batteries for electric vehicles, with other carmakers also developing their own models based on the technology, an expert told Caixin. But its entry to the field has put more attention on the technology, which in some cases may be getting rushed to market without sufficient testing, others said.

Last year, Chinese electric vehicle startup Nio Inc. adopted CATL’s 811 batteries in its ES6 model, claiming the vehicle could travel over 500 kilometers (311 miles) on a single charge. GAC New Energy, the electric vehicle brand under Guangzhou Automobile Group Co. Ltd., has also rolled out vehicles that use CATL’s 811 batteries.

Their preference for high energy density batteries picked up in 2017, after Beijing added long mileage as one of the criteria for its incentive mechanism to subsidize new-energy vehicle (NEV) makers.

The next year some companies began rushing (link in Chinese) the development phase of new batteries to obtain more government subsidies sooner, said Ouyang Minggao, a member of the Chinese Academy of Sciences and executive president of the China EV100 Association. That may have led to unsafe products entering the market, which in turn led to some instances of NEVs catching fire, he added.

Last year, China deepened cuts to longtime subsidies for NEV makers, causing sales to decline sharply. At the same time, the higher cost of high-density batteries like the 811 types continued to drive up costs, further squeezing NEV-makers in search of elusive profits.

Despite some doubts over the development of 811 batteries, the automobile battery expert, who requested anonymity, said the development of high energy density batteries remains the right direction for the technology over the longer term. But carmakers must strike a delicate balance between safety and cost, he added.

While development of high-density batteries may be one key to making NEVs more attractive, building more charging stations is equally important. EV charging points were categorized as “new infrastructure” projects announced by China in March, aimed at creating new momentum for economic development. Premier Li Keqiang said in May in the annual government work paper that the government aims to “build more charging facilities and promote wider use of new-energy automobiles.”

State Grid Corp. of China has said it will increase the number of charging stations by 10 times in 2020 from last year’s level, pledging 2.7 billion yuan ($382 million) of investment as part of the government’s push to support high-tech infrastructure. China Southern Power Grid Co. Ltd. also said in April that it aims to build stations with 380,000 charging points in the next four years through investment or acquisitions.

Lu Yutong contributed to this report.

Contact reporter Timmy Shen (hongmingshen@caixin.com) and editor Yang Ge (geyang@caixin.com)

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