Germany ready to pour billions into battery cell production

The German government wants to take battery cell production into its own hands. Minister for Economy and Energy, Peter Altmaier, proposes the construction of two large-scale factories, funded with a billion euro each. Another 600M have been earmarked for R&D.

The plan reported by Tagesspiegel has been in the making for some time and is in line with German as well as European politicians, who had stressed the importance of producing batteries in Europe. Their calls remained unheard by both carmakers and suppliers.

This may now change as the German government reveals plans to invest a billion euro each in two mass production facilities. While details remain scarce, one could be located in Lausitz, a region previously known for its coal industry. Moreover, it borders on Poland so that a bilateral project may be a possibility. This is even more likely in light of a recent Polish-German battery alliance, which could follow the example of Airbus (we reported).

For the second facility, Tagesspiegel alleges that Continental and Volkswagen may team up in order to set up such a battery production facility in their home county Lower Saxony. Indeed VW CEO Herbert Diess had been reported to be looking into battery supply options, among them an in-house solution. At the same time, VW had called on suppliers to invest into battery cell production to no avail. Bosch for example had said no early on (we reported).

Moreover, Minister Altmaier is planning to spend another 600 million euros, this time on battery cell development. A research facility will allegedly be set up together with the Fraunhofer Association.

The Cabinet will vote on the proposal on October, 19. If accepted, it would bring about a change in line with recent EU policy. Back in Febrauary, the European Commission had installed the European Battery Alliance with the aim to set up cell production on the continent in order to break the dependency on Asian suppliers.

For the time being though, this dependency is increasing. Both BMW and VW recently turned to CATL in order to secure their battery supply. This had convinced the Chinese battery maker to begin building its own European “Gigafactory” in Erfurt next year reportedly.

Their factory will rival Sweden’s Northvolt who claim to be developing “the world’s greenest battery” at their NorthvoltLab. However, large scale battery production is to happen up north, in Skellefteå, Umea. The Swedish version of a Gigafactory will start production from 2020.

tagesspiegel.de (in German)