germany battery alliance Germany Spending $1.2 Billion on Battery Production in Effort to Reduce Reliance on Asia.

[G. David Felt]

Autoblog story

In an effort to save automobile production jobs from the shift away from ICE auto's, Germany has earmarked a $1 billion Euros or about $1.2 Billion US dollars in a push to protect local jobs and reduce alliance on outside country battery production.

Many in the industry say it is too late as they are too far behind in the current battery technology. Germany says it will focus on Solid State batteries as LG Chem with battery production in Poland and Samsung with battery production in Hungary are the main suppliers to the big German 3 auto suppliers.

Boston Consulting Group believes that battery cell production capacity will exceed demand by 40 percent in 2021, due to massive new production coming online in Japan, China and Korea as well as around the world. The flip side of the BCG excessive supply is McKinsey & Company that says as all automakers ramp up EV production, it should outstrip supply by 2022.

The battery R&D plus production is a big push by the German government that says building electric auto's take less time and less positions due to a reduction in complexity. This will lead to reduced jobs on the assembly line as automation continue to expand. Germany's VDA auto industry association says that Germans ban on ICE auto's by 2030 threatens 436,000 jobs in Germany that will just disappear from car companies and their suppliers.

Germany is pushing to expand the battery alliance to protect European jobs from Asian battery companies. Just changing EV sales to 10 to 20 percent of production in the coming years will require over 100 gigawatt hours of battery production that is currently not available yet above the planned capacity by Asian producers especially in China.  Europe also says as they push R&D to develop solid state batteries, this will remove the need for rare earth elements making the process cleaner and safer for all.

The uphill battle is is underlined by the world's biggest automotive suppliers, Bosch which has made it clear they are focusing on everything else in an EV except lithium-ion cells as it will be too costly to try and compete with the asian and american companies already developing them.