Germany calls for European battery production with EV development accelerating

10 May 2018

With electric vehicle (EV) development a key component of many manufacturers’ plans for the future of mobility, battery production is a hot topic.

Europe currently has no significant production of the cells required for vehicle battery packs, with Asia dominating the market. However, in order to become more cost-effective, carmakers need to ensure they can source their own supply rather than pay a third party developer.

German Chancellor Angela Merkel has said that she believes chances are increasing for automotive manufacturers building up their battery production facilities in Europe.

′I’m detecting a certain rethink among automakers,’ Merkel said at an event in Berlin hosted by the National Academy of Science and Engineering.

Merkel said she backed a call from Henning Kagermann – the academy’s outgoing president – who said Europe needed such battery production. She believes that such an industry would form a significant part of the value-added chains for EVs.

The Chancellor also added that she was in favour of doing more for Germany as a research location, to boost innovation in the country. Pointing to the government’s intention to raise the proportion of research and development spending to 35% of economic output by 2025, she added that the automotive industry played an important role in this process.

Last month, Economy Minister Peter Altmaier said the German government was ready to offer support to the makers of batteries for electric vehicles, adding that one possibility might be to exempt them from some energy levies.

Volkswagen thoughts

Meanwhile, Volkswagen Group CEO Herbert Diess has backed a European industry alliance for battery cell production amid fears the region could fall further behind Asia in development of the technology should something not be done soon.

Diess said VW has nearly secured all the raw materials it needs to complete the first phase of its electric-car strategy. The company has so far picked partners to provide battery cells and related technology worth around €40 billion for its electric-car program, about 80 percent of the planned volume.

′These figures clearly indicate we need to reopen an intensive dialogue on building up battery cell capacity in Europe in an alliance with industry,’ Diess told shareholders at the company’s annual meeting.

The European Union is backing the EU Batteries Alliance to create a competitive battery cell manufacturing in Europe. Sweden’s Northvolt is seeking at least €4 billion to open a plant in the north of the country to rival the scale of Tesla’s US Gigafactory, while Bosch recently said it would not follow through with plans to build a battery plant because of the large financial investment required in a market dominated by Asian companies.