Battery cell production in Germany hung out to dry

The TerraE consortium that had planned to set up a mega battery cell production in Germany has failed as none of the businesses involved was ready to shoulder the investment, reports German media. TerraE thus follows other players in the country that continue to ignore the government calling on them to do their bit.

Still, Peter Altmaier, Federal Minister for the Economy has not given up and announced the presentation of a new battery cell production consortium on November 13, according to Tagesspiegel newspaper. Varta Microbattery Systems and Ford have been named as forming part of the consortium but this has yet to be confirmed.

And there was yet stranger news of the Minister allegedly having promised the power company RWE a considerate amount of money if they would build a battery factory and finally give up coal mining. The latter has been the reason for an ongoing dispute between environmental activists and RWE over a woodland area called Hambacher Forst.

But back to TerraE – the conglomerate made up of 20 companies from production to chemistry specialists including BMZ and StreetScooter has now failed. They initially planned to install a battery facility not unlike the Tesla Gigafactory when they got together in May 2017. The idea was to scale up capacity until it would reach 34 GWh in 2028. Yet the project remained unfulfilled since none of the firms wanted to make the considerable investment required.

In this they are not unlike the rest of the (German) industry reportedly. Bosch had estimated it would require 20 billion euros to set up a meaningful factory and still it would be uncertain if it would be enough to compete with established suppliers in Asia (we reported).

The German government however, has moved having cell production facilities in the country up the agenda regardlessly. Only last month, Minister Altmaier proposed the construction of two large-scale factories, funded with a billion euro each. His call echoes the European Commission that has started to shape a European Battery Alliance (EBA) not unlike Airbus earlier this year.

While the EC is vaguely calling for a “green battery” that adheres to EU standards in order to set it apart from Asian competitors, the industry is pointing to a technological solution, namely solid-state batteries. The German government has reserved funding for this as well. 16 million euros are to form a new research cluster reportedly.

Yet, if Germany will ever become big in batteries is uncertain. On the European level, players such as Northvolt of Sweden or Saft of France, that set up a cooperation with Siemens, Manz and Solvay are moving ahead and want to develop (solid-state) batteries with EU funding (we reported). Moreover, it is the big companies from China and Korea such as CATL and SK Innovation that are installing local battery cell production on the continent, for now.

tagesspiegel.de (in German)