Nortvolt flop and China tariffs expose Germany’s battery disaster

Electric cars: Northvolt drop and China tariffs expose Germany’s battery disaster

Northvolt is a flagship project funded by climate minister Robert Habeck with billions – but BMW, of all companies, has rejected Northvolt coldly. Experts sound the alarm: Germany is threatened with complete dependence on Chinese cells and raw materials.

The plans were ambitious. Germany should become a battery country and a production center for energy storage should be built in Kaiserslautern. “Mercedes-Benz is investing in ACC and building a European battery champion with global ambitions,” the Swabian automaker announced three years ago. World-class player, you don’t make it in Stuttgart-Unterturkheim anyway. That’s why they joined the Stellantis Automotive Cells Company (ACC) project. But now comes the disappointment. Nothing will come of the planned gigafactory – at least for now.

Gigafactory for German batteries stopped for now

Mercedes has not always had a lucky hand in its European battery production projects. Nine years ago, the Swabians quietly buried the factory in Kamenz, Saxony, which was designed as a model battery factory. In hindsight, a missed opportunity. At the time, Daimler and Mercedes, like other German car manufacturers, saw batteries as a “commodity”, a standard product that could be easily purchased. But this turned out to be a gross miscalculation. In times of looming protectionism and trade conflicts, a foreign battery producer is closer to home than it is European Trousers.

Northvolt: BMW prefers to buy batteries elsewhere

Also in BMW The plug has been pulled on two major battery production projects. On the one hand, the Munich-based company canceled a large order from Scandinavian producer Northvolt because it had apparently lost confidence in their technological reliability when series production increased. BMW also says this between the lines: “Northvolt and the BMW Group have jointly decided to focus Northvolt’s activities on the goal of developing the next generation of battery cells. The BMW Group remains very interested in establishing a high-performance manufacturer of circular and sustainable battery cells in Europe.”

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A reasonable request. But that’s in the future and there’s no mention of specific plans in the statement. Which makes sense on BMW’s part. After all, the Scandinavians are still a start-up, and with a model range as important as the Neue Klasse, you can’t afford to experiment.

BMW relies on Chinese batteries from CATL and EVE

Producing high quality battery cell series is a big challenge. The world of Munich makes no compromises with the new order anyway. That is why the cooperation with the Chinese cell manufacturer SVolt and the construction of a factory in the Saarland seem to have stopped. Delivery delays from Asians are said to be the reason here. That is why the battery cells assembled in high-voltage storage units at the plant under construction near Dingolfing are based on “old acquaintances” – the Chinese producers CATL and EVE.

For Dr. Philipp Seidel of the management consulting firm Arthur D. Little is a fatal sign. “In my view, with the current hesitancy on electric vehicles and the cautious development of the battery industry here, we are dealing the final death blow to the European car industry and thus to all the suppliers and service providers that depend on it,” says the expert. .

“Hesitant growth of the battery industry is death”

The question is whether German carmakers are willing and able to work together to bridge the technology gap China I’m catching up. After all, producers from the Middle Kingdom have paid a lot of money to perfect cell production and are now benefiting from it. Cost pressure is increasing in Europe. This is treated with incomprehension by Philipp Seidel. “The German perspective is very small, we have to see it and think about it in a European way. We see this in the value chains and geographical distribution of the automotive industry with its suppliers, as well as in the case of batteries. The volumes are also quite large for Europe.”

No more expensive imports? Lithium can be produced in Germany using a new method

The failures of the past are now catching up with German automakers. For too long it was assumed that we were operating from a position of strength and that we could deal with battery suppliers the way we were used to in our years of working with local suppliers. To put it bluntly, this relationship was characterized from the beginning: whoever pays, creates. But in the world of electrification, these mechanisms no longer work.

How quickly does new battery technology become obsolete?

It’s no coincidence that BYD, a Chinese automaker whose expertise originally lay in batteries, is on the rise. “The European battery industry is in something of a dilemma: we must now rapidly and deliberately develop capital-intensive capabilities and skills from all sides and apply them before the technologies become obsolete. Unfortunately, there is a lack of design security,” says Philipp Seidel.

There are no good prospects for Germany as an automobile industry. Philipp Seidel outlines a grim scenario if we don’t immediately step on the technological gas: “We must be clear in Germany and Europe: Together with semiconductors, batteries are a technology on which our prosperity and industry depend and will significantly depend . .”

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