The next generation of Bayerische Motoren Werke BAMXF or the BMW Group’s electric vehicles (EVs) in Europe will get a supply of battery cells from battery cell manufacturer Eve Energy, from 2025, per sources. The auto magnate’s ‘New Class’ electric cars will be provided with large, cylindrical lithium-ion battery cells.
The China-based firm stated that its production line is under construction, and supply will commence after negotiations by both parties.
Eve Energy was established in 2001 and listed on the Shenzhen GEM in 2009. Over a span of nearly two decades, it has become a globally competitive lithium battery platform company. Its core technologies and comprehensive solutions for consumer and power batteries have gained popularity over the years.
Rectangular prismatic batteries have emerged as the most common form in the auto industry in the past two years as they are economical owing to their dense packaging. However, of late, cylindrical batteries have gathered steam as these are believed to be more cost-saving due to upgrades introduced in the energy density.
BMW has been taking great strides in electrification with a target of more than 1.5 million electric cars by 2030. To live up to the tough competition in the EV domain, it is following the footsteps of the global EV giant, Tesla Inc. TSLA, which started manufacturing larger-format cylindrical battery cells this year. Reports surfaced in May that BMW intends to switch from prismatic cells to round cells for its New Class series. During that time, it was assumed that Samsung SDI would be the default option for BMW as the Korea-based battery maker already had plans for a production plant for such batteries. Recent news, however, suggests a different picture.
It is also believed that Eve Energy will supply BMW’s plant under construction in Debrecen, Hungary, where the New Class will initially be built locally. Moreover, according to media reports, Eve Energy has signed a contract with BMW to become its main battery supplier for the EVs to be launched in Europe in 2025. A while ago, another China-based battery cell manufacturer CATL announced that it will build its second cell factory in Debrecen. In the light of this news, it is therefore not yet certain whether Eve Energy will be the sole supplier for BMW or one among many. There have not yet been any comments from BMW. It is expected to come up with some battery-related announcements at the beginning of September and provide some clarification.
BMW has been boosting its orders for battery cells to cater to the demand surge for EVs. The progress in its ChargeForward plan, the first smart charging program offering customers the scope to maximize the integration of renewable energy while optimizing EV charging, augurs well. Moreover, it has been reported that BMW intends to build five gigafactories for electric car batteries through partnerships, strategically positioned globally at places where the auto biggie manufactures its EVs. It is only recently that BMW entered into battery manufacture, but once it has set its focus, it appears that it has laid out an ambitious target.
Shares of BAMXF have lost 12.2% over the past year compared with its industry’s 22.6% decline.
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Zacks Rank & Key Picks
BAMXF carries a Zacks Rank #3 (Hold), currently.
Better-ranked players in the auto space include Harley-Davidson HOG, BorgWarner BWA and Tesla, each carrying a Zacks Rank #2 (Buy), currently. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Harley-Davidson has an expected earnings growth rate of 6.9% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 8.5% upward in the past 30 days.
Harley-Davidson’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one. HOG pulled off a trailing four-quarter earnings surprise of 49.52%, on average. The stock has risen 6.9% in the past year.
BorgWarner has an expected earnings growth rate of 2.4% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 3.9% upward in the past 30 days.
BorgWarner’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. BWA pulled off a trailing four-quarter earnings surprise of 29.45%, on average. The stock has declined 6.9% over the past year.
Tesla has an expected earnings growth rate of 74.6% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 5.5% upward in the past 30 days.
Tesla’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. TSLA pulled off a trailing four-quarter earnings surprise of 32.17%, on average. The stock has risen 33.5% in the past year.
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