Christina Amann, Victoria Waldersee

BERLIN (Reuters – BMW will not scale up production of its battery cells for electric cars until technology is better, according to the German firm. This despite the fact that the brand has seen record sales in 2021.

The automaker is optimistic that it will reach the highest end of its 9-10.5% profit margin forecast for 2021. Currently, Northvolt and CATL buy battery cells. But, Northvolt is currently building its own pilot plant.

Nicolas Peter, chief finance officer at BMW told Reuters that he believes the company has secured its needs over the past few years with the support of partners. He added that BMW won’t be rushing to expand cell production.

He said, “We’re not at the stage where we know what technology will be with us over the next 10-15 year.” That’s why we need to share a lot with international partners in the development of battery cells.

Manfred Schoch, chief of the Works Council, has called for BMW’s production to increase in order to create new jobs and secure supplies.

German rivals Volkswagen, (DE:), and Daimler (OTC) have both direct stakes at battery manufacturers.

Daimler (33%) holds Automotive Cells Company. In July, it announced that eight gigafactories were planned for making battery cells in partnership with other partners.

Volkswagen will build six cells plants in Europe with its partners, including Northvolt in China and China’s Gotion High-Tech. It also has a 20% share in Northvolt.

Peter stated that BMW will build sites for battery assembly at each factory, but it will depend on other partners to provide cells.

OUTPUT AND MARGIN

BMW shares rose to a six-year high at 99.3 euros following Reuters’ report by Peter. However, they sank back to 98.9 just after Peter’s remarks, slightly below the opening price of 97.7.

Daimler was displaced by the carmaker for the first five years. The premium manufacturer sold 2.21 million more vehicles than Daimler.

Ola Kaellenius, CEO of Daimler, stated that high delivery rates were not his priority. He prefers to increase prices and improve margins than maximize the sales volume.

BMW has maintained high output despite a worldwide shortage of chips in part due to its close relationships with suppliers. However, BMW is slightly less cautious about margins than competitors like Daimler and Volkswagen’s Audi. It expects a margin between 9%-11% for 2021.

Peter maintained that electric vehicle transition was happening faster than BMW anticipated two- to three years back. Last year’s sales increased by more than 20% and the order books were fuller than ever.

BMW was an early participant in the electric vehicle market, and its product line is still behind others. To meet customer demand, a spokesperson stated that BMW plans to hire an additional Saturday shift from April at its Munich facility.