Just this week BMW AG showed the world a brand new electric SUV and shared some good news about their costs. Key features of the all new ‘Neue Klasse‘ range include EV batteries that are 40 to 50 percent cheaper than current models, helping BMW achieve margin parity with combustion-engine vehicles by 2026.
The company aims to raise its automotive EBIT margin from 5 to 7 percent in 2025 to 8 to 10 percent in the future.
Meanwhile, did you know that BMW announced in back in 2022 that its next-generation “Gen 6” EV batteries, due to launch with the “Neue Klasse” EVs in 2025, are expected to be 50 percent cheaper and offer significant improvements in energy density and performance.
While general EV battery costs have been falling globally due to falling mineral prices, the specific savings from BMW’s new battery technology are tied to their internal development and upcoming vehicle launches.
BMW aims to halve the cost of its next-generation batteries with the introduction of its “Gen 6” technology for the “Neue Klasse” vehicles planned for 2025.
Beyond cost, these new batteries will also feature greater energy density (more range) and faster charging capabilities.
The cost of EV batteries in general has been on a downward trend globally due to falling mineral prices, although this is not uniformly beneficial across all markets.
While battery costs are decreasing, automakers have sometimes prioritized higher-profit models over affordable mass-market EVs, which can offset some of the price benefits for consumers.
It has already been shared by BMW management that BMW’s future EV batteries are designed to be cheaper through the use of Lithium Iron Phosphate (LFP) cathodes, which eliminate costly cobalt and nickel.
BMW is also developing next-generation solid-state batteries, which are expected to offer higher energy density and faster charging. Beyond BMW, the broader EV industry is seeing battery cost reductions due to increased competition, higher factory output, and falling prices for key minerals like lithium, leading to lower overall production expenses.
Right now, if you had to replace a BMW EV battery, the cost in Europe on average, would be between £8,000 and £20,000 (which is about RM45,000 to RM114,000).
