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July 2, 2020

Germany grants EUR300m to Varta for battery research

Germany has granted EUR300m (US$339m) to battery company, Varta as part of its EUR1.5bn investment in cell research and production.

By Rhodri Morgan

Germany has granted EUR300m (US$339m) to battery company, Varta as part of its EUR1.5bn investment in cell research and production.

“The establishment of innovative and sustainable battery cell production is a high priority for us in Germany,” said German Minister of Economic Affairs and Energy, Peter Altmaier. “It is necessary to remain competitive during our energy and transportation transition, to create new jobs and to ensure prosperity.

“We have taken a large step toward large-scale domestic production of automotive and industrial batteries.” 

The initiative is part of a European Union Important Project of Common European Interest. (IPCEI). Four other companies with battery cell projects in Germany will also be receiving grants: BASF, BMW Group, Opel and Umicore.

The European Battery Alliance believes the value of the market for European-made batteries could reach as much as EUR250bn by the mid-2020s.

Lithium-ion batteries account for around 40% of the value creation of electric vehicles, added the German Economics Ministry. 

The aim is for the projects underwritten by the government to start making batteries in 2022 and enter industrial-scale production by the mid-2020s at the latest. 

Producing batteries domestically rather than abroad is already a trend, noted Germany Trade & Invest (GTAI) automotive expert, Stefan Di Bitonto. “It’s obvious right now battery manufacturers are moving closer to their customer base,” said Di Bitonto.

“Germany is the heart of the European automotive industry and we’re seeing increased volume in investments in this area 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 in future, German automotive production will primarily get the batteries for its electric vehicles directly from Germany.”

Germany aims to have 7m to 10m EVs on the country’s roads by 2030 and government-backed incentives of up to EUR9,000 are available to purchasers of new EVs and hybrids. The move will open up business opportunities for German subsidiaries of foreign companies as well.

“By expanding to Germany, companies active in the value chain in this area can profit from this development and take part in a revolutionary change, influence things to come and position themselves advantageously for the mobility of the future,” said Di Bitonto.

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