Germany Plays Catch Up, Pours $1.2 Billion Into EV Batteries

Mercedes-Benz EQC battery


Currently Japanese, Korean and Chinese firms dominate battery cell production

According to Reuters, Germany has earmarked $1 billion euros ($1.2 billion USD) to jump start local production of electric car battery cells. The effort is intended to reduce the reliance of German automakers on Asian battery suppliers.

This investment would help grow a German “battery cells consortium” and establish a production facility in West Germany. In addition, 500 million euros is expected to finance a solid-state battery research factory.

Other than BMW, most German automakers have been slow to embrace electrification. The German government and automakers have historically protected the diesel engine. After the scandals surrounding VW, diesel has been in a death spiral. The rapid growth of Tesla has also put additional pressure on European manufacturers. Now there are signs that other German automakers might be taking EV tech seriously. But righting such a massive ship requires time and money.

Suppliers in China, South Korea and Japan have a significant head start on battery manufacturing. Most European automakers have existing agreements with Asian suppliers such as CATL and LG Chem. Germany wants to ensure that automakers are not reliant on foreign battery manufacturers. But can German sourced cells compete in a crowded market?

European Battery Production

Many industry observers believe solid-state batteries will soon become the industry standard. Focusing a significant amount of their investment on solid-state battery development is a logical move. Germany is already playing catch-up on lithium-ion battery technologies. There is still time to gain a foothold on future battery developments.

All of this financial assistance will be temporary of course. According to Economy Minister Peter Altmaier, “In a few years, Europe will have a competitive battery cell sector that can survive without state aid.”

More information and the official announcement of this plan is expected in the coming weeks.

Source: Autoblog

Categories: Battery Tech, General

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32 Comments on "Germany Plays Catch Up, Pours $1.2 Billion Into EV Batteries"

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Good to see but will production start in 2020 or 2025 ??

Too little, too late.

neves is late, more when Germany think introduce a nez technology with more range for vehicles – solid state battery –

Too little, too late for what?? What are you talking about?

You can forget about 2020.

“According to Reuters, Germany has earmarked $1 billion euros ($1.2 billion USD) to jump start local production of electric car battery cells. The effort is intended to reduce the reliance of German automakers on Asian battery suppliers.”

Reuters must have made a mistake.

The amount must have been €10 billion euro.

Reuters must have forgotten to add the “0” after the “1”.

Actually, I hope that they forgot to ad “00” after the “1”.

It would be incredibly stupid to invest just €1 billion euro.

These German people aren’t that stupid. Right?

No, the amount is 1 billion (= 1000 million). That is clearly not enough for massive battery manufacturing. Remains to be seen whether the European Commission will see this as state aid or not. Otherwise French, Italian or other car manufacturers might complain against illegal competition. And about the last question about the German people being stupid or not. They are minions. They need a leader, and if the leader says diesel is good, they buy diesel. It’s as simpel as that.

€1 billion is only a start… but at least it is a start.

Let us not use the perfect to drive out the good.

“Let us not use the perfect to drive out the good.”

OK, I understand it. Good point.

My point was actually that the Germans still don’t seem to realize how soon things are going to change. They must act now (and in full force) in order to be able to stay ahead in the game. The longer they delay the right actions, the less chance they will have to survive.

Most likely, it isn’t a pure government investment but a co-investment, which will only be made if each local participant in the consortium invests a serious sum as well .

I appreciate the effort, but when I think taxpayer funded consortium, I somehow think of names like Desertec (the one that wanted to build GW sized solar plants in northern Africa), or more recently, TerraE (the one that wanted to build a Gigafactory in Germany last year). And 500 million for all solid state research could be better invested in a fast charging infrastructure (or lantern post chargers in urban areas).

1 billion Euros — or about 1/5 of what Tesla / Panasonic is spending on the gigafactory in NV…..

When the only thing you produce car wise is EV, you’d hope the investment would be larger…… German automakers still make a lot of non EV cars so invest accordingly.

Yeah but 5B is only enough to make about 3-500,000 vehicles. It’s a drop in the bucket. Germany needs to get WAY more serious or they’re going to get their lunch eaten.

Actually, it’s probably time to start divesting and converting what can be salvaged to EV production. Hockey sticks can be very vertical on the time axis. Maybe the establishment of a German battery cell production capability should be separate from the auto industry. Or just have Tesla get to work on the next Gigafactory, located in Germany and devoted to 2170 cell production, made available to all comers.

For some reason, legacy makers are still loathe to accept small cylindrical cells, despite the proven track record not only in hundreds of thousands of Tesla vehicles, but also tens of millions of e-bikes, scooters, rickshaws etc…

Shared gigafactories certainly make sense — but only if these are operated independently, there is a chance that other car makers will be willing to embrace them… Indeed there are quite a lot of these being built or planned in Europe already, by various battery makers. But the Germans apparently want the factories to be locally owned, too — which seems a bit arbitrary to me: first priority should be creating the conditions for local cell production to be competitive — where the investments come from is a secondary concern…

BMW’ supply deal with CATL was $4B and that is ramping off in site prep this year. Not to mention local EU effort as well. So $1b is useful but not enough. Most of the battery IPs are owned by Japanese and Korean companies. Chinese not so much as they tend to outsource to Koreans as well. I saw some CATL specs on their battery plans but seems they are 25% lower density than Tesla’s tech. Also, we can see Tesla has the best cooling tech allowing for good efficiency of their EVs. Germans will catch up in time as they slow their hybrid transition to retain ICE cars for as long as they can.

I guess BMW was the first German maker to dabble in EVs — but I wouldn’t exactly say they *embraced* it…

BMW got scared after moving ahead with the I3 and stopped new BEV development, so their EV expert team left towards Byton. Now they are trailing their German peers by 1-2 years.

From what I gather, the original focus of the “i” program was actually on fuel cell vehicles; with the i3 essentially being just a side project… When they realised that hydrogen fuel cells are not going to take off, they wound down the entire program, instead of refocusing on EVs…

Well I said they embrace ‘electrification’. 🙂 BMW has a wide variety of plug-in hybrids across their entire lineup.

Most of these PHEVs are poorly implemented compared so a Volt or Clarity… but they rolled them out at a much quicker pace than other German brands, and they sell them worldwide. And actually they sell quite well.

The i3 was a serious project, a from scratch BEV; recall BMW Group is only half the size of Mercedes_Benz (revenue terms) and a quarter the size of VW Group.

Yeah, but then the totally dropped the ball 🙁

The EU (tax payers funded) cell production was supposed to be established in Poland near the German border. Now it seems to be scaled down to a German tax payer funded cell production pilot in the Western part of Germany.

There was a private company financed Li-Ion cell production in the making ‘Terra E’ , which failed due to the approx 20 German blue-ship corporations unwillingness to invest together 2 Billion Euros for a Li-Ion cell production. So without taxpayers money shouldering a risk-less funding nothing seems to move …..

Yet again ‘Private Profit Public Liability’

For these sorts of strategic investments, I think it’s actually justified: since when they succeed, there is a lot of benefit to the public, not just private profits. China for example did extremely well with their credit program for solar cell makers…

What’s that? Huge private corporations need public money to pull their heads out?
Huge surprise…not.

Former GDR dictator Walter Ulbricht said in the 1950ies about GDR economy competing with West Germany:
“Überholen ohne Einzuholen” (Overtaking without catching up). Well, it didn’t work out. History repeating …

Well, to be fair, they got the “without catching up” part nailed exactly right, and consequently most GDR companies got taken over by West-German companies when the wall came down.
And then there was the “Soliaritaetszuschlag”, a tax that was added on the income tax in 1991 for one year to pay for the reunification cost and the cost of the first US-Irak war (still puzzles me why Germany had to pay for that one). Now, almost 28 years later, Germans still pay that tax.

The vast majority of companies got gutted, not taken over…

“This investment would help grow a German “battery cells consortium” and establish a production facility in West Germany.” – West Germany as a nation ceased to exist in 1990. It is now just ‘Germany’, or ‘The Federal Republic of Germany’ to give it its full name.