Exclusive-China’s EVE will supply BMW with large Tesla-like cylindrical batteries for its electric cars in Europe

China’s EVE Energy Co Ltd will supply BMW with large cylindrical batteries for its electric cars in Europe, two individuals with information regarding this matter said, as the German automaker follows Tesla Inc in adopting the new technology.

EVE has signed contracts to be BMW’s primary supplier of the battery cells in Europe for its new series of electric vehicles due to hit the market in 2025, said one person who has direct information on the deal.

Tesla this year began manufacturing its new larger format 4680 cylindrical battery – meaning 46 millimeters in diameter and 80 millimeters long. It has said it expects that the battery should bring down production costs and further develop range compared to the current-generation 2170 cylindrical battery.

Guangdong-based EVE’s batteries will be comparative in size, said the sources, who were not authorized to speak to media and declined to be identified.

Organization filings likewise show EVE is arranging an enormous cylindrical battery plant in central China.

EVE, a supplier to BMW in China, didn’t straightforwardly address Reuter’s queries when requested remark. BMW said it intends to release some battery-related news toward the beginning of September however declined further comment.

The shift by BMW, which presently utilizes prismatic batteries, underscores the growing momentum for a larger format of cylindrical batteries. Prismatic batteries, which are rectangular in shape, have turned into the most widely recognized type of auto battery in the beyond two years as they can be all the more densely packed, saving money on costs. Yet, proponents of cylindrical batteries contend the fresher larger format cells have become more cost-effective due to improvements in energy density.

China’s CATL, the world’s biggest battery maker, is likewise because of beginning providing cylindrical batteries to BMW in 2025.

Assumptions are high that these batteries will likewise be large-sized cells. CATL didn’t respond to a request for comment on planned dimensions.

It was not quickly clear the number of batteries BMW intends to procure from EVE and CATL.

EVE’s deal with BMW provoked the Chinese organization to announce in March that it would build a cylindrical battery production facility in Debrecen, Hungary – its most memorable plant in Europe, as per the individual with direct information on the deal.

BMW is likewise constructing a plant in a similar city where it intends to produce EVs developed on its Neue Klasse platform.

Government incentives are driving interest for EVs in Europe and the United States, prodding Chinese battery and EV makers to accelerate plans to set up production bases overseas.

CATL announced last week it would build Europe’s greatest battery plant with a yearly limit of 100-gigawatt hours, likewise in Debrecen, to supply European automakers. Mercedes-Benz will be its biggest client.

With quite a bit of new battery demand likely to be for large cylindrical, Chinese battery makers which have depended on a huge domestic market where prismatic cells reign, should change tacks like EVE and CATL, said Duan Bing, an analyst at Nomura.

Eve, founded by lithium-ion battery researcher Liu Jincheng in 2001 and furthermore a supplier to Xpeng Inc, is a lot smaller player than CATL. It ranks eighth with a 2.3 percent market share in China, as per information from the China Automotive Battery Innovation Alliance.

By comparison, CATL makes 47.6 percent of the absolute batteries installed in EVs in China.