How BMW pushes product and supply chain sustainability with the new BMW X5

Numbers travel further than most engineering claims, and the number BMW wants attached to its fifth generation BMW X5, is "40". In the product development process, supply chain CO₂e emissions of the BMW X5 were reduced by around 40 percent; the reduction being based on a comparison with industry averages from an internationally recognized LCA database. It is a headline figure, no doubt - and headline figures tend to flatten the work behind them.

In an exclusive interview with AMS, attending Spartanburg in South Carolina for the unveiling of the new model, Nils Hesse, VP of Product Sustainability at BMW Group, was willing to reverse this flattening, expanding out to precisely where that 40% came from and, more revealingly - from where it did not.

Batteries first, aluminum and steel close behind

Asked which of the four lifecycle stages drove the largest single gain, Hesse did not equivocate. "In an electric vehicle, the supply chain is the main contributor to CO₂ reduction. The measures with the highest impact are battery cells. Reducing the CO₂ footprint of the cells was the biggest single lever, followed by aluminum and steel."

That ordering matters, because it confirms what much of the industry already suspects but rarely hears confirmed on the record by a manufacturer's own sustainability lead. Battery cells remain the single largest contributor available to an automaker trying to decarbonise the supply chain of an electric vehicle - ahead of body structure, ahead of production energy, ahead of everything else in an OEM's bill of materials.

It also explains why BMW has invested so heavily in the chemistry and sourcing of its Gen6 cylindrical cells, now used in production of the BMW iX5's high voltage battery, which, the carmaker says, have cut CO2e emissions by around 28% per watt hour compared with the Gen5 prismatic cells fitted to the BMW iX.

Hesse was equally direct about where the harder work still sits. "The most challenging stage remains across the supply chain. In an electric vehicle, the use phase is already largely electrified, shifting the main CO₂ reduction potential into the supply chain itself. That is why renewable energy is used in the production of anode and cathode materials, as well as in cell manufacturing.

"Battery cells remain the most important component in that chain, but increasing the share of secondary materials is still difficult because recycled battery-grade materials are not yet available at sufficient scale."

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It is a candid admission. And the constraint is not one of appetite or engineering capability, but simply the physical supply of recycled battery grade material in the market today.

Where the mass actually sits

The new BMW X5 achieves a striking proportion of secondary materials across the vehicle, including in structurally demanding components such as aluminum suspension parts, rims and wheel carriers, and swivel bearings, all manufactured using renewable energy through both electrolysis and production.

The aluminum used in the doors contains 35% recycled and closed loop material sourced from BMW's own press shop at Spartanburg, and the base material for the yarn used in the headliner fabric is made entirely from recycled PET.

In the battery electric BMW iX5 60 xDrive, for example, secondary materials account for roughly one third of the total vehicle weight, equivalent to around 940kg. Asked which material streams that figure is most heavily weighted towards, Hesse pointed to something a little less glamorous than batteries - but far heavier on the scale. "The biggest impact by mass, however, is unarguably, steel. It accounts for the highest secondary material share making it the biggest lever."

That answer is a useful corrective to a sustainability narrative that tends to fixate on lithium and cobalt. Steel remains the physically dominant material in any large SUV, and BMW's progress here is substantial in its own right, with around 50% of the flat steel used in the BMW X5 body now sourced as electric arc furnace steel, carrying a high proportion of secondary content, produced with renewable energy through close collaboration with local suppliers in North America.

A hundred thousand suppliers deep

BMW contractually requires every battery cell supplier it works with to run on 100% renewable energy. It is the kind of commitment that reads cleanly on a sustainability slide, and considerably less so once you ask how it is actually enforced beyond the first link in the chain. Hesse's answer was unusually candid about the limits of contractual leverage in a modern automotive production and supply chain.

"Our direct contractual relationship is with the tier-one supplier, and this is where we anchor requirements such as the use of renewable energy for our production needs. At the same time, these requirements are designed to cascade beyond tier one: the tier-one supplier is expected to pass equivalent obligations, including on energy use and other decarbonisation measures, on to its own suppliers further down the value chain."

The scale of what that cascading obligation actually involves is where the conversation became genuinely striking, and where the realities of sustainability 'scopes' begin to take on more solid forms. "The challenge is that once you follow the whole chain down, the BMW Group overall has more than 100,000 direct and indirect suppliers. Proving or evidencing compliance at the deepest layers of that chain is the challenge. And this, of course, feeds into manufacturing."

A hundred thousand suppliers is not a figure that lends itself to spot audits or site visits. It is a figure that only really works through contractual cascading, trust, and increasingly sophisticated traceability tooling; none of which fully closes the verification gap Hesse is describing. For those in the know - or those who want to know, Catena‑X, co-initiated by BMW Group and industry partners, is one example of how the automotive sector is addressing this challenge.

Five drivetrains, one carbon logic

Zooming into production; from November 2026, the G65 (BMW's internal codename) generation BMW X5 will run petrol, diesel, plug-in hybrid and battery electric variants down the same line at Plant Spartanburg, with hydrogen following in 2028.

It raises an obvious question for anyone thinking about lifecycle emissions rather than production flexibility (or for the savvy of mind - both), namely whether building multiple powertrains on a shared platform produces a better or worse sustainability outcome than dedicating a platform to a single technology.

Hesse's answer cuts against the instinct that shared platforms must offer some inherent efficiency advantage from a carbon perspective. "Despite what many may assume, there isn't actually a significant difference," he says. "The main distinction between a combustion engine vehicle and an electric vehicle, from a CO₂ perspective - is the battery. Put another way, if you remove the battery from an electric vehicle, and the engine from a combustion engine vehicle - the two are almost identical. So in this regard, a shared platform doesn't actually offer a particular benefit in itself."

Retooling on the move at BMW Spartanburg

Plant Spartanburg's $1.7 billion retool now runs petrol, diesel, hybrid and electric X5 variants down a single line, while Plant Woodruff strips a step out of battery assembly entirely. Equipment renewal, not just new buildings, is doing the heavy lifting.

Nor, in his account, does going the other way solve anything either. "Equally, with a purpose-built platform, such as the BMW iX3, we still face the same challenge of reducing CO₂ emissions from the batteries."

"The measures required," he says, "are largely the same either way." The ramifications offer a useful insight for the wider industry to absorb. Platform architecture is both a manufacturing and a cost decision, but the carbon problem, according to Hesse, lives largely concentrated inside the battery - regardless of what sits around it.

What shredding does, and does not change

The move from Gen5 prismatic to Gen6 cylindrical cells has been framed publicly as a chemistry and manufacturing story, but Hesse was clear that the 28% reduction traces back to two specific levers rather than the format change itself. "There are two main levers for reducing CO₂ in this area," he says. "First, renewable energy - which of course, has a very high impact. The second, though, is the use of secondary raw materials for nickel, lithium and cobalt and thirdly, product- and process innovations."

That distinction carries through to end-of-life recycling too, where BMW's own account resists the idea that switching cell formats meaningfully changes recycling economics. "On recycling, we are working with partners to find ways of recycling cells without full shredding - or of shredding and then separating the materials afterwards.

"The format itself," he says, "doesn't really matter at that point - and that stands whether it's a phone battery, a cylindrical cell, or a prismatic cell - the end process is essentially the same once shredded. Battery size is relevant to the type of shredder required, but the outcome is the same regardless of even format."

Cells arrive from Woodruff 15 miles up the road, to be assembled into battery packs at Spartanburg, to full manufacture of the new X5 models

This is a subtle but important point for suppliers and recyclers designing capacity around next generation cell formats. The hardware footprint of a shredding line may need to flex for high-voltage battery, battery modules or cells, but the underlying separation chemistry - and the CO2e case for doing it at all - does not change with format.

Verification, three ways

Scope 3 emissions are traditionally where sustainability claims come apart under scrutiny, being the hardest tier of any supply chain to measure and the easiest to overstate. Asked how far down its supply chain BMW currently has genuine data-level visibility on embodied carbon beyond tier one, Hesse pointed to three layers of verification the company relies on. These appear to include ongoing internal checking, external reporting and verification of the vehicle's product carbon footprint, and confirmation through BMW's annual report, which is checked by an independent external auditor.

Why Catena-X is becoming critical to automotive production

Once voluntary, Catena-X is fast becoming essential infrastructure for automotive manufacturing, enabling earlier fault detection, precise sustainability reporting and resilient production through sovereign, standardised data exchange across OEMs and suppliers.

It is a structure that leans on established financial style audit discipline to backstop a carbon claim, an approach that mirrors the TÜV Rhineland validated Product Carbon Footprint BMW intends to publish alongside the BMW X5's series launch, complete with the underlying calculation methodology made publicly available. From supply chain to production, sustainability is now a fully operational working system for the OEM.

Whether that three-tier structure genuinely closes the visibility gap Hesse described earlier, across a supply chain that extends to more than 100,000 direct and indirect suppliers across BMW Group, is a question the industry will keep asking long after the BMW X5 badge is on the road.

What BMW has offered with this generation of the model is an unusually granular account of where its production decarbonization actually comes from: battery cells first, steel and aluminum close behind, and a supply chain whose deepest layers remain, by the carmaker's own admission, difficult to prove. But difficult, increasingly, does not mean impossible.