Has Europe missed the battery boat? Careful observation of the market permits no other interpretation: affordable battery cells for the electromobility of tomorrow will be produced in Asia.
To counteract this trend, a battery summit — consisting of VW, Daimler, Siemens, BASF and other participants — was held in Brussels in autumn 2017 on the initiative of EU Commissioner Maroš Šefčovič. “Batteries are the centrepiece of the industrial revolution”, says Šefčovič who primarily wanted to promote his idea for common production between manufacturers. Because: “The lack of battery cell production in Europe puts our industry at risk.” VW alone intends to buy batteries worth 50 billion euros by the end of 2030 which would mean trebling global production.
The competition is fierce, and the conditions are demanding. According to experts, a manufacturing plant for batteries costs 1.3 billion euros to build and it would make a loss for the first ten years. This is what the chemicals group Evonik found to its cost with its partner Daimler: Together they manufactured battery cells for Smart and Mercedes cars in Kamenz in Saxony, batteries which could be purchased at the same time from LG at a quarter of the price. “We have still not got over the failure of our own manufacturing plant for battery cells”, says Andreas Docter, responsible for electric drives at Daimler.
Has only one technology any future in Europe?
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At present, the battery cells originate primarily from Panasonic or LG in Japan and Samsung in South Korea. And increasingly also from Chinese manufacturers such as BYD or CATL who in turn have announced that they intend to manufacture in Europe themselves in a few years’ time. The production conditions are favourable, particularly in Eastern Europe, as cheap coal-fired electricity is available here although this has a negative effect on the life cycle assessment of electric cars. LG is already making lithium-ion cells in Poland as is Samsung in Budapest.
“We want to set up a genuine production operation in Europe along the entire value chain including recycling”, EU Commissioner Šefčovič emphasises. “If we want to take the change to electromobility seriously, we must support battery production.” Whether the words will be followed by deeds remains to be seen. The chances look good for projects such as Terra E, an industrial consortium from Germany. After the summit in Brussels, Managing Director Holger Gritzka is hoping for a large injection of cash for his own project to set up lithium-ion cell production. A planning office has already started work in Saxony to prepare for constructing a factory.
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The suppliers Bosch who were not represented at the battery summit, also continue to believe in production in Europe even if with one caveat. Asian manufacturers have such good command of lithium as the base material that only a completely new technology would be worthwhile for Europe. But this is still at the research stage. “Our researchers and developers are hard at work at the moment”, confirms Volkmar Denner, CEO of Bosch.