Chinese companies compete in the global lithium battery market!

It is reported that Germany will announce an investment of 1 billion euros (about 1.2 billion US dollars) to support the alliance's production of electric vehicle batteries. In addition, the German government also plans to invest in a research and development institution to support its new generation of solid batteries.

The move, expected to be announced this week, is aimed at reducing German carmakers' reliance on Asian battery suppliers and protecting jobs in Germany during the transition from the internal combustion engine to the electrification era.

But Germany may be late to invest in electric vehicle batteries. Electric vehicle manufacturers in Asian markets are also increasing production, but some experts say a supply crisis may prevent Europe's emerging battery manufacturers from large-scale production.

Asian companies dominate, Germany may be "one step behind"

The move by the German government to set industrial policy is also a breakthrough as the government has not usually interfered in business decisions. It is also part of a European government plan to form a battery alliance to meet the challenge posed by companies such as Japan and South Korea. Ensuring that local companies are integrated into the electric vehicle supply chain is crucial for Germany, which is economically dependent on the success of its auto industry.

However, some analysts pointed out that compared with Asian companies, at least in terms of current technological levels, European companies are far behind Asian companies.

Volkswagen's supervisory board plans to discuss electric vehicle and battery strategies at a meeting on November 16. It has previously stated that it has carried out battery production and research and development at its Salzgitter plant. A person familiar with the matter said on November 8 that Volkswagen's supervisory board will discuss the far-reaching cooperation with South Korean battery manufacturer SK Innovation.

Volkswagen

South Korea's LG Chem has long been supplying electric vehicle batteries produced in Poland to some automakers, while Samsung SDI and SK Innovation also plan to build factories in Hungary. As the world's largest electric vehicle battery manufacturer, CATL said it will build its first European factory in East Germany, and its cooperation with BMW has also received government support.

LG Electronics

But German Chancellor Angela Merkel told business leaders that it was vital for Germany to develop its own electric car batteries to protect its position in the auto industry. In recent years, German auto executives have been reluctant to launch electric cars, focusing instead on diesel cars. But the challenge now is how to make internal combustion engines comply with increasingly stringent emissions regulations.

Merkel

German carmakers have warned that because electric cars take less time to produce and their location is shifting from overseas to foreign battery manufacturers, it may lead to a decline in job demand. The German Association of the Automotive Industry said that a ban on gasoline and diesel cars starting in 2030 would threaten 436,000 jobs in auto and parts companies. Hirte said: "Batteries are a key technology and an important component in the value chain, which is why we want to build factories in Germany first."

If European companies unite, can Asia continue to lead?

The importance of setting up factories in Europe in terms of jobs and profits led the European Commission to set up the European Battery Alliance (EBA) in 2017, but Sweden's Northvolt is considered the only competitive company so far.

European Union

As part of the German government's investment, Finance Minister Altmaier is also in dialogue with German and European companies, as well as neighboring countries, hoping to reach cooperation. He is also working to coordinate with the European Union to resolve any government subsidies and antitrust investigations. "In the next few years, Europe will be competitive in the battery field and can survive without government subsidies," Altmaier said after meeting with Maros Sefcovic, vice president of the European Energy Union. Altmaier will announce more details of the battery plan at a two-day meeting starting on November 12 in Berlin, where Maros Sefcovic will also attend.

Two people familiar with the matter said the 1 billion euro investment in the German battery alliance will help it build its first factory, which may be in west Germany. The German government also plans to support the construction of a second factory, which may be in the Lausitz region near the German-Polish border, where two local elections will be held in 2019.

New Energy

A spokesman for the Ministry of Finance said Altmaier had started talks with relevant parties but had not yet made a final decision. In addition, the German government also plans to invest 500 million euros to co-sponsor a research and development plant, which will help German companies get ahead when solid-state batteries can enter the market on a large scale.

Lithium-ion batteries may be overtaken by solid-state battery technology in the next few years, and solid-state batteries are cheaper and have higher energy density. The location of the research factory has not yet been decided, but the government plans to take into account the intentions of local departments and companies. A spokesman for the German Ministry of Science and Technology said that the government uses the private sector to organize leading research institutions to support the research and development of solid-state batteries.

The group includes Varta, BASF, Volkswagen, BMW, Continental, ThyssenKrupp, carbon fiber maker SGL Carbon, Belgian materials company Umicore, Coperion and Heraeus.

Carbon Fiber

At present, German car companies mainly purchase batteries from Asian suppliers, including CATL, LG Chem, and Samsung SDI, but BMW chose to cooperate with Novot. The challenges faced by German companies are increasing. Bosch also said that it would not produce lithium-ion batteries, saying that the cost is too high. The researcher of electric mobility in the Fraunhofer region is not optimistic. He said: "In the next few years, if car companies increase the production of electric vehicles to 10% to 20% of total sales, European battery factories will need more than 100 gigawatt-hours. Europe needs more battery factories, and this must be built as soon as possible." The shift to solid-state batteries may also reduce European suppliers' dependence on rare metals, which are mainly controlled by China.