The Munich-based carmaker wants to be ahead of the competition when it comes to new technologies by investing in start-ups.
(Photo: Reuters)
Munich It is a major obstacle to the breakthrough of electric mobility: the prices for lithium, which is essential for the batteries of electric cars, have increased more than fivefold within a year. In addition, mining is energy-intensive and uses a lot of water.
The car manufacturers are therefore working intensively on strategies for a more sustainable lithium supply. BMW i Ventures is now the lead investor in Mangrove Lithium, as the independent venture capital subsidiary of the Dax group announced on Tuesday. The Canadian company specializes in refining, i.e. refining the light metal obtained.
“Raw materials such as lithium are becoming increasingly important for the automotive industry,” said Kasper Sage, Managing Director at BMW i Ventures, the Handelsblatt. It is crucial how the raw materials are extracted and processed. Investments are made in technologies that could help reduce the CO2 emissions of each individual process step. Recycling will play an increasingly important role in the future.
Mangrove Lithium has developed a technology that converts virgin and recycled raw lithium directly into battery-grade material through an electrochemical process. This can then be used in any type of lithium-ion battery. “This reduces production costs and consumes significantly less energy, which leads to a reduction in CO2 emissions,” says BMW.
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Prices are an important factor. The metals required account for up to 80 percent of the costs of the batteries. “It is obvious that if prices for raw materials such as lithium or nickel remain at the current level, it poses a threat to the ramp-up of electromobility,” Yann Vincent, head of battery manufacturer ACC, recently warned.
Car manufacturers such as GM, Toyota and Volkswagen are therefore increasingly securing direct access to critical raw materials. In addition, they and the battery specialists are looking for alternatives and ways to improve recycling.
Create a closed lithium cycle
BMW is also active in this area. For example, the Munich-based company got involved with the start-up Solid Power, which is working on the development of solid cell batteries. The technology is considered a possible successor to today’s lithium-ion batteries. The cells are potentially more powerful, cheaper and recyclable – but technically not yet fully developed.
The drastic increase in raw material prices endangers the transition to electromobility.
(Photo: Bloomberg)
The carmaker also acquired a stake in Lilac Solutions last year via BMW i Ventures. The company has developed a process for the gentler extraction of lithium. An ion exchanger is used here, which is intended to significantly improve the removal of salt water deposits from the brine in terms of efficiency, costs and sustainability.
Mangrove’s technology can be combined with Lilac Solutions’ process, said BMW ventures manager Sage. In this way a closed circuit can be created. “The waste product of one process is one of the essential consumables of the other.”
>> Read here: The German car manufacturers rely on these battery strategies
BMW wants to be present at an early stage in technologies that could become established in a few years through i Ventures’ holdings. To this end, the group set up another 300 million dollar fund last year, which is to be used primarily to invest in sustainability and electromobility.
BMW wants to be ahead of the competition thanks to start-up ideas
BMW always has its own strategy in mind when it comes to its start-up commitments. Siemens, on the other hand, invested with its start-up unit Next47 in areas far removed from the core business and sees itself more as a classic venture capital investor.
In contrast, the carmaker interprets its offshoot as an early radar. Ideally, it would be like Solid Power: BMW i Ventures got involved in the early phase with a single-digit million amount – in consultation with the engineers in Munich. A year ago, BMW and Ford announced a joint investment of $130 million in the solid cell battery developer. BMW hopes to be able to use the technology from 2025 and thus be ahead of the competition.
Sage did not want to comment on whether it could also work at Mangrove. Before the BMW Group got involved financially, there had already been a development partnership with Solid Power for several years. Mangrove from Canada is initially a venture capital investment – “possibly with strategic relevance in the long term”. He is convinced that “the company will greatly increase in value when the first fully scaled recycling plant is in production”.
New and recycled raw lithium are converted directly into battery-grade material through an electrochemical process.
(Photo: Mangrove Lithium)
Mangrove now intends to use the capital from the financing round to accelerate the construction of the first commercial production facility. Using a novel oxygen-air cathode design, lithium chloride is directly converted into battery-grade lithium hydroxide. An intermediate step in refining that has hitherto been customary can be omitted.
“Our vision is to make green lithium refining a reality,” said Saad Dara, chief of Mangrove Lithium. Thanks to a modular approach, production capacities can be flexibly adjusted. “By eliminating an entire conversion step in the process, we save costs and energy and thus make projects feasible that would otherwise not be economically attractive.” In this way, more projects could be financed and thus made interesting for investors.
BMW i Ventures can also imagine further investments in the raw materials sector. You see a lot of interesting companies in this field, said Sage. “It would therefore not surprise me if we make further investments in this area.”
More: The German car manufacturers rely on these battery strategies