Germany Amps Up Domestic Battery Production, Offers Massive State Subsidies

Germany Amps Up Battery Production, Offers Grants

The government's first grant – worth EUR 300 million was awarded to battery company Varta.

The German government is investing more than EUR 1.5 billion (about $1.7 billion US) in battery cell research and production – a key element in the country’s planned transition to clean energy and mobility.

Major players in the industry are lining up to get involved in the initiative, and on Tuesday, June 30, German Minister of Economic Affairs and Energy Peter Altmaier officially awarded the government’s first grant – worth EUR 300 million (roughly $337 million) – to battery company Varta.

“The establishment of innovative and sustainable battery cell production is a high priority for us in Germany,” said Altmaier. “It is necessary to remain competitive during our energy and transportation transition, to create new jobs and to ensure prosperity. Today, we have taken a large step toward large-scale domestic production of automotive and industrial batteries.” 

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

The European Battery Alliance believes that the value of the market for European-made batteries could reach as much as EUR 250 billion (about $281 million) by the mid-2020s. And lithium-ion batteries account for approximately 40% of the value creation of electric vehicles, says the German Economics Ministry. 

The aim is for the projects underwritten by the government to begin 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, explains Germany Trade & Invest (GTAI) automotive expert Stefan Di Bitonto. Germany Trade & Invest GTAI) is the Federal Republic of Germany’s agency for promoting trade and investment to and from Germany.

“It’s obvious right now that battery manufacturers are moving closer to their customer base,” Di Bitonto says. “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 that in future German automotive production will primarily get the batteries for its electric vehicles directly from Germany.”

Germany aims to have 7 to 10 million EVs on the country’s roads by 2030, and government-backed incentives of up to EUR 9000 ($10,108 US) are available to purchasers of new EVs and hybrids. That 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,” say Di Bitonto.

You May Also Like

ENNOVI Achieves EcoVadis Platinum Sustainability Rating

Earning the Platinum Medal for the fourth year ranks ENNOVI in the top 1% of companies for sustainability in 2023.

ENNOVI-Achieves-EcoVadis-Platinum-Sustainability-Rating

ENNOVI has been recognized for its sustainability performance by EcoVadis, a provider of business sustainability ratings. The company has secured the EcoVadis Platinum Medal, placing it in the top 1% of over 130,000 companies assessed worldwide in 2023. This marks the fourth consecutive year ENNOVI has achieved the Platinum rating, which it first received in 2021. ENNOVI said its sustainability team has focused on improving areas such as procurement and labor and human rights.

Rematec Updates Floor Plan for Amsterdam 2025

The event will highlight innovation and sustainability in the automotive aftermarket, focusing on connected vehicles and remanufacturing advancements.

Remantec-Amsterdam-education
Gilbarco Veeder-Root Announces Turnkey EV Charging Business

The recharging ecosystem is designed specifically for the fuel retail industry.

Automechanika Frankfurt 2024 Aims to Embrace Industry Change

The show will focus on sustainability, AI, automation and new talent recruitment in the global automotive industry.

Continental-automechanichka-1400
LKQ to Sell Poland’s Elit Polska to MEKO AB

Elit Polska is a Poland-based distributor of automotive parts, consumables and workshop equipment.

LKQ to Sell Poland’s Elit Polska to MEKO AB

Other Posts

India Auto Market: Transition from ICE to Smart Mobility

Bhatia discusses what is needed for India to emerge as a globally competitive manufacturing and export base, among other related topics.

India-Auto-Market-Transition-from-ICE-to-Smart-Mobility
MEMA Aftermarket Suppliers to Present at TAYSAD Conference

Philip Atkins will provide insights into the current state and future trends of the automotive and commercial vehicle aftermarket.

MEMA-Aftermarket-Suppliers-to-Present-at-TAYSAD-Conference
DGI, EVage Motors Partner on Electric Drive System in India

They will target the Asian EV market, offering far more efficient electric trucks, resulting in longer life and a reduced cost of ownership for fleet owners, the companies said.

REE Automotive Exhibiting at ACT Expo 2024

The company said it is expanding its full by-wire EV offering and will showcase its software-driven approach to EVs.

REE-Automotive-Exhibiting-at-ACT-Expo-2024