Battery location Germany: Is De-Industrialization Threatening?
The plans were ambitious. Germany was to become the battery land and a production center for energy storage was to emerge in Kaiserslautern. "Mercedes-Benz is participating in ACC and building a European battery champion with global ambitions," the Swabian automaker announced a little over three years ago. A global big player, nothing less would suffice for Stuttgart-Untertürkheim. That's why they joined the Stellantis project Automotive Cells Company (ACC). But now comes the disillusionment. The planned gigafactory will not happen – at least for now.
The miscalculation of the German automotive industry: Batteries are not off-the-shelf commodities
Mercedes hasn't always had a lucky hand with its European battery production projects. Nine years ago, the Swabians quietly buried the plant in Saxony's Kamenz, which was planned as a flagship battery factory. In retrospect, a missed opportunity. At that time, Daimler or Mercedes, like other German automakers, viewed batteries as a "commodity," goods that could be easily sourced. But this has proven to be a gross miscalculation. In times of looming protectionism and trade conflicts, a foreign battery producer's local shirt is closer to their skin than the European pants.
BMW has also pulled the plug on two important battery production projects. On the one hand, the Munich company canceled a large order with Scandinavian producer Northvolt because it apparently lost confidence in the technological reliability during the ramp-up to mass production. BMW also says this between the lines: "Northvolt and the BMW Group have jointly decided to focus Northvolt's activities on developing next-generation battery cells. The BMW Group remains strongly interested in a high-performance manufacturer of circular and sustainable battery cells establishing itself in Europe."
No Northvolt: BMW prefers to buy its cells from CATL and Co. for now
A sensible concern. But that lies in the future, and no concrete plans are mentioned in the statement. From BMW's perspective, this is only consistent. After all, the Scandinavians are still a start-up, and with an important model series like the Neue Klasse, there is no room for experimentation. The mass production of high-quality battery cells is a significant challenge. The Munich company isn't making any compromises with the Neue Klasse. This is apparently why the collaboration with the Chinese cell producer SVolt and the construction of a factory in Saarland has also been stopped. Here, delays in delivery from the Asian side are cited as the reason. Therefore, for the battery cells that are being assembled into high-voltage storage at the new plant near Dingolfing, they rely on "old acquaintances" – the Chinese producers CATL and EVE. For Dr. Philipp Seidel from the consulting firm Arthur D. Little, this is a fatal sign. "With the current hesitation in EV and the cautious development of the battery industry here, in my view, we are dealing the final death blow to the European automotive industry and all the suppliers and service providers connected to it," the expert states.
The question is whether German automakers are even willing and able to pull together to catch up with China technologically. After all, the producers from the Middle Kingdom have paid a lot of tuition fees in perfecting cell production and are now benefiting from it. In Europe, cost pressure is growing. This meets with Philipp Seidel's incomprehension. "The German perspective is too small; we need to see and think European. We see this in the value chains and the geographic distribution of the automotive industry with its suppliers and also in the case of batteries. The volumes are only large enough on a European scale."
The Balance of Power Has Shifted
The failures of the past are now catching up with the German automakers. For too long, they believed they could operate from a position of strength and deal with battery suppliers in the same way they were accustomed to in long-standing collaborations with local suppliers. This relationship, exaggeratedly put, was characterized by the principle: He who pays the piper calls the tune. But in the world of electromobility, these mechanisms no longer work. It is no coincidence that BYD, a Chinese automaker whose expertise originally lay in batteries, is on the rise. "The European battery industry finds itself in a kind of dilemma: one would now need to build capacities and skills quickly and decisively from all sides with high capital expenditure and implement them before the technologies become obsolete. Unfortunately, there is a lack of planning certainty for this," says Philipp Seidel.
No good prospects for Germany as an automotive location. Philipp Seidel paints a bleak scenario if the technological gas pedal is not immediately pushed:
"We must realize in Germany and Europe: Batteries, alongside semiconductors, are a technology on which our prosperity and our industry are heavily dependent and will continue to be. If we decide against promoting and enforcing these topics with the necessary energy, it is de facto a de-industrialization decision and long-term endangers our prosperity and our security."
What does this mean?
Hopefully, the automotive industry in Germany hasn’t fundamentally miscalculated here: Batteries, and even more so the cells, are the core product of future mobility. And precisely those one can and will by no means want to produce oneself. BYD is currently proving that it can be done: Initially, they came from battery and cell manufacturing and now they are also building entire cars - which are seen as a complete system.
Researched the state of battery production for us: Wolfgang Gomoll; press-inform
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