The German government will spend €1 billion through 2021 toward the cost of setting up domestic production of lithium-ion battery cells to reduce Europe's dependence on Asian suppliers ahead of what it predicts will be a tenfold increase in demand by 2030, Reuters reported Nov. 13, citing Economy Minister Peter Altmaier.
The government is reportedly encouraging a number of companies in Europe to form consortiums that would meet about 30% of global demand for electric-vehicle batteries by the end of the next decade.
"Production should start as quickly as possible," Reuters reported Altmaier as saying. The government estimated each consortium would require about €500 million to start producing battery cells.
Volkswagen AG is open to the idea of joining a battery production consortium, Reuters reported Nov. 12, citing an unnamed source familiar with the matter. Volkswagen declined to comment.
Companies already engaged in talks with the government include German battery maker Varta AG, chemicals producer BASF SE and Ford's German subsidiary Ford-Werke GmbH, unnamed sources told Reuters.
Altmaier said Germany was interested in involving other EU states and was in talks with France, Poland and Austria, as well as a number of unspecified companies. Altmaier said battery cell plants would operate out of more than one location and the first is expected to start operations in 2021. Each consortium is likely to create up to 2,000 jobs.
The minister said the first investment decisions would be made in the coming months.
Several European companies, including BASF and Sweden's Northvolt AB, a startup founded by former Tesla Inc. executives, have recently announced separate plans to set up facilities to produce batteries or materials for batteries as they seek to reduce dependence on the world's biggest suppliers, which include Samsung SDI Co. Ltd., Panasonic Corp. of North America Inc., Toshiba Corp. and LG Chem Ltd.
Battery production projects across Europe announced for the next five years totaled 450 GWh of capacity by late October, according to S&P Global Platts Analytics.
S&P Global Platts Analytics and S&P Global Market Intelligence are owned by S&P Global Inc.
