Dudenhöffer: ‘state financed battery plant is burning tax money’
France and Germany are planning two giant battery factories offering 1.500 jobs each. They are willing to cough up 1,2 billion euros of subsidies of the estimated 5 to 6 billion needed. But according to Ferdinand Dudenhöffer of the German CAR Institute, “this is burning the EU tax payer’s money”.
No need to catch up
In May, French Minister for Economy, Bruno Le Maire, and his German colleague, Peter Altmaier, announced the plan. State funding for which they hope to get the green light from Europe in autumn. Something likely to happen as EU Commissioner for Energy, Maros Sefcovic, is the driving force behind a “European Airbus for batteries” initiative.
But CAR director, Ferdinand Dudenhöffer, sees batteries for electric cars as a mass-produced article that Europe doesn’t need to excel in. “There is no European initiative for car tires either,” he says. “European car manufacturers can choose from South Korean, Japanese, American, or Chinese suppliers. We won’t lose anything if we don’t produce them ourselves. So why trying to catch up with Asia?”
Invest in better battery materials
He thinks it makes more sense to invest in research into better battery materials and high-tech infrastructure for producing e-cars. Like the chemical giant, BASF is doing by investing 400 million euros in providing better anode and cathode materials in Finish Harjavalta, together with Russian Noriisk Nickel.
Simone Tagliapietra from the Brussels’ think tank Bruegel is somewhat sympathetic with the French-German initiative. “The EU is not trying to catch up with China. That race is lost. But the initiative is actually about developing the new generation of batteries, apart from producing standard lithium-ion batteries. Something China isn’t doing enough today.”
Several initiatives from German carmakers
In the French-German plan, companies like Opel, daughter of French PSA, BMW and BASF are involved, together with battery manufacturers Varta and Saft, the latter being the daughter of giant oil company Total. Germany plans to announce on June 25th which project can count on half a billion of state funding, to which support from the regions will be added.
It doesn’t mean that every German car manufacturer will buy at this sole battery factory. They are all involved with several initiatives, says Dudenhöffer. They want to prevent that one supplier can dominate them. And they have no other choice than going electric to avoid bankruptcy in the future, he says.
Dudenhöffer points at BMW that is setting up a battery production line itself. Not to cover its need for batteries entirely, but to show suppliers what exactly BMW wants them to deliver.
150.000 jobs lost
He is also not impressed by Minister Altmeirs’ argument that the battery initiative will create new posts. He sees it inevitable that 150.000 jobs of the 250.000 producing ICE engines today will disappear in Germany alone. In total, 850.000 Germans are working in the car industry. But producing batteries is typically something robots are excellent in, Dudenhöffer argues.
Meanwhile, the number of initiatives in Europe for new battery factories is increasing, as everybody is counting on an explosion of the number of electric cars in the next years in Europe.
6.000 GWh needed by 2050
In 2016 worldwide there was a battery production capacity of 85 gigawatts hour, the German Oko-Institute calculated. But in 2030 there will be required between 1.000 and 1.500 GWh and by 2050 even 6.000 GWh.
A pick at random from the various initiatives that already are announced for Europe:
1. Chinese battery maker CATL is building a factory in German Erfurt to produce 100 GWh per year.
2. BMW is working with Swedish Northvolt, and Belgian battery material supplier Umicore for a 32 Gwh factory in Skelleftea (Sweden) and a test plant is under construction in Vasteras.
3. Volkswagen is also working with Northvolt and will invest 1 billion euros to jointly produce batteries in Salzgitter (Germany) in a 30 GWh plant under the brand ‘European Battery Union (EBU)’
4. German battery maker BMZ is working with Ford and Belgian Umicore and 14 other partners on the TerraE project for an 8 GWh factory in Karlstein (Germany), which could expand to 35 GWh per year by 2028.
5. South Korean SK Innovation is building a factory in Komarom (Hungary) to produce 250.000 lithium-ion car batteries a year or 7,5 GWh.
6. Fellow-countryman Samsung SDI also has a production facility in Hungary, in Göd for 1,5 GWh.
7. And yet another big player from South Korea, LG Chem, that delivers the batteries for the Audi e-tron, among others, has opened in 2018 a factory in Wroclaw (Poland) and will triple its production of cells to supply for 300.000 electric cars a year.