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Germany's Varta Makes Plans to Mass Produce EV Battery Cells

As Germany's automakers prepare to switch to building more electric models, there is concern that local companies will not be able meet the increasing demand for electric vehicle battery cells, so efforts are underway increase battery production in the country.

German battery maker Varta has reached a research agreement to lay the groundwork for mass production of lithium-ion battery cells for electric cars as it seeks to take on leading Asian producers in the sector.

Currently, German automakers Audi, BMW and Mercedes Benz rely heavily on battery cells produced by companies in China, Korea and Japan. However, Germany is looking to increase production locally.

Varta specializes in building batteries for large storage systems for solar energy as well as for hearing aids. The company has agreed to a cooperation deal with Germany's Fraunhofer Institute, a scientific research body, to develop EV battery cells, the two parties said on Monday. The deal is part of a larger investment in EV battery production.

Last week, officials in Germany announced an investment of 1 billion euros ($1.2 billion) to support a consortium looking to produce electric car battery cells and plans to fund research to develop next-generation solid-state batteries, three sources told Reuters.

Varta, chemical giant BASF and Ford's German subsidiary Ford-Werke GmbH are among companies involved in talks with Germany's Economy Minister Peter Altmaier about building local battery cell alliances, according to Reuters. Volkswagen is also open to joining the consortium exploring production of electric car battery cells in Germany, a person familiar with the matter said last week.

The goals is to reduce German carmakers' dependence on Asian suppliers and protect jobs at risk from the shift away from diesel and gasoline powered engines.

As part of the research project, Varta hopes to gain technical advantage over battery cell production from Asian manufacturers, such as Contemporary Amperex Technology Co. Limited (CATL), which supplies batteries to BMW and many other Chinese automakers. Varta is in intensive talks with relevant market players to expand its product line, Varta CEO Herbert Schein told reporters in Stuttgart.

Thomas Bauernhansl, director at the Fraunhofer Institute for Manufacturing Engineering and Automation IPA, said the focus of the research project was to set up a more digitized production line that will reduce the current scrap rate of 10 percent.

Asian battery producers are already ramping up their output to meet demand, increasing the risk of a glut that could hinder the establishment of battery cell production by European newcomers.

In July, CATL said it picked a site in eastern Germany to build a battery-cell factory that will help supply the country's major automakers.

Varta is currently the only company in Germany with experience in the mass production of battery cells and this reduces the risk of market entry in new areas such as large lithium-ion battery cells for electric cars, Bauernhansl said.

Economy Minister Altmaier has said there were interested parties for several consortia on battery cell production. He expects the first investment decisions at the end of the first quarter of 2019.


resource from: Reuters

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