Berlin Science Minister Anja Karliczek said on January 23 that the German government will fund a research institution to provide German electric vehicle (EV) companies with battery know-how to compete with Asian manufacturers that currently dominate the power battery industry.

Anja Karliczek said that it will invest 500 million euros (3.85 billion yuan) to support research on existing and next-generation EV battery technologies. The funding comes from 1 billion euros earmarked by Economy Minister Peter Altmaier to support consortiums preparing to invest in large-scale production of electric vehicle batteries in Germany.

"The German car industry should not be dependent on Asian suppliers for the batteries it needs," Karliczek told a business conference in Berlin. "This is not only an independent issue, but also a matter of keeping the German economy competitive."

The new factory aims to transfer the well-known enterprises of Germany's Fraunhofer Institute of Science to private enterprises and help reduce the risks of enterprises preparing to start electric vehicle battery production.

She did not give a timetable for the investment funding, or whether some cash would be provided directly to German companies. The project would be allowed under certain conditions under EU rules on the development of new technologies in strategically important areas.

Karliczek said the government will decide on building research infrastructure by mid-year. German companies BMZ Group, Liacon Batteries, Customcells, EAS Batteries and TerraE will participate in the construction. Swiss-based battery maker Leclanche, which does most of its production in Germany, will also participate.

Currently, Japan's Panasonic Corp., Korean manufacturers Samsung SDI Corp. and LG Chem Corp., and China's CATL are dominating the EV battery market.

Matthias Zentgraf, CATL's regional president, said that CATL aims to start producing batteries from its Erfurt, Germany, factory in Europe in 2021 and produce 60 gigawatt hours (GWh) of batteries per year starting in 2026, which is expected to be used by BMW and others. Lithium-ion batteries are available from the manufacturer.

Zentgraf said it would consider joining the effort to set up research facilities.

The European Commission launched its own European Battery Alliance (EBA) in 2017 to support EU production. Sweden's Northvolt has emerged as Europe's only serious contender so far.

Germany hopes to lay the foundation for large-scale battery production in Europe. Economy Minister Peter Altmaier expects to receive investments from both consortiums in the first quarter of 2019.

According to sources, companies involved in discussions with Altmaier to establish a German battery alliance include Varta, chemical giant BASF and Ford’s German subsidiary Ford-Werke GmbH.

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Germany plans to invest 500 million yuan in EV battery technology research to compete with the Asian power battery market

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