German state grant to boost battery production… and recycling

The German government is to invest more than EUR 1.5 billion in battery cell research and production, starting with a EUR 300 million grant to battery manufacturer Varta.

The funding is the first step in an initiative under the European Union’s Important Project of Common European Interest (IPCEI) programme. eNews Bulletin reports that, along with Varta, four other companies with battery cell projects in Germany will also receive grants from the Ministry of Economic Affairs and Energy: BASF, BMW Group, Opel and recycler Umicore.

With a potential market value for European-made batteries of EUR 250 billion by mid-2020s, according to the European Battery Alliance, and with lithium-ion batteries already accounting for approximately 40% of the value of electric vehicles, the German Government’s support for such projects could yield significant gains for the whole country.

Projects underwritten by the funding initiative are expected to begin making batteries in 2022 and enter industrial-scale production by the middle of the decade at the latest. ‘We are igniting the next step in battery cell production in Germany,’ says federal minister of economics Peter Altmaier. ‘Battery components are already being produced in Germany so now the next steps towards mass production of battery cells for automotive and industrial applications have to be taken.’

Crucial role for recyclers

According to Altmaier, it is important that the CO2 balance of batteries improves and raw materials are used more economically. ‘I therefore rely on an intelligent and efficient interaction of battery research, innovation and recycling. This will bring innovative value chains and qualified jobs to Germany and Europe.’

Germany expects to have between seven and 10 million electric vehicles to its roads by 2030 and government-backed incentives of up to EUR 9 000 are available on new EVs or hybrid vehicles.

Production at home

Such support provides long-term stability for the growing EV market which, in turn, boosts business  for German subsidiaries of foreign companies looking to expand their operations. This is being matched by a trend for battery manufacturing to develop domestically, rather than relying on international imports, according to Germany Trade & Invest’s automotive expert Stefan Di Bitonto. ‘It is obvious that battery manufacturers are moving closer to their customer base,’ he says. ‘Germany is the heart of the European automotive industry and we’re seeing increased investments in various German regional states, most prominently CATL in Thuringia, Northvolt in Lower Saxony, Farasis in Saxony-Anhalt and most recently Tesla in Brandenburg. We believe that in the future German automotive production will primarily get batteries for its electric vehicles directly from Germany.’

Big opportunities

Di Bitonto adds that, by expanding to Germany, companies active in the automotive value chain can profit from this development ‘and position themselves advantageously for the transport of the future’.