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Battery Cell Production in Europe: Vision or Reality?

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FRANKFURT, Germany – Over 1,600 participants gathered last week for the 16th international Battery Experts Forum in Frankfurt, Germany. The event evolved into the leading get together of the battery industry and for the exchange of technological developments. Not for the first time, production of battery cells in Europe was THE leading topic. Will it ever become reality or is it only vision for the future?

Battery Cell Production in Europe: Vision or Reality?
‘Aim is to start a cell factory that has 2GWh output in 2021,’ said BMZ CEO Sven Bauer at the Battery Experts Forum. – Photo Bike Europe

“In 2021 we want to start with the production of battery cells in Germany,” said BMZ CEO Sven Bauer at the press conference during the Battery Experts Forum. Last December BMZ Group (Europe’s biggest battery maker) took over TerraE Holding GmbH. At that time BMZ announced to invest approximately 300 million euro for the 4 GWh output of battery cells planned in the first phase. This TerraE consortium was founded by three investors with the intention to build a factory for large-scale li-ion cell production. But the project didn’t take off successfully. However, BMZ and Sven Bauer continued the TerraE project as he is determined to realize battery cell production in Europe.

The battery cell market is dominated by Asian manufacturers

‘Production is a learning curve’

“We have to face the fact that financing the giant TerraE project is not easy, even though we are supported by the Government,” said Bauer. “But it’s essential to start with cell production in Europe and that we regard it to be a learning curve. Currently our aim is to start a factory with a 2GWh output. We have to start small as this project requires lots of money.” Next to BMZ also involved in TerraE are Bosch, Siemens, VW, Hella, Deutsche Post, Leclanche, EAS Batteries, Customcells, Fraunhofer Institute and Liacon. They all are gathering their experience and pooling the collective power in a consortium for realizing the TerraE joint project together with the government.

The technological roadmap for li-ion batteries offers lots of opportunities for the coming years. Sven Bauer explained “Only 5 to 10 percent of the potential that the li-ion technology offers, is currently utilized. For batteries we have only just started with li-ion and that’s why the Asian manufacturers have invested in huge R&D departments.”

Asian market domination

“The battery cell market is dominated by Asian manufacturers,” said Michael Deutmeyer, MD of EAS GmbH – a producer of high quality cylindrical lithium ion cells based at Nordhausen, Germany. “It will take a huge effort for the European industry to only get close to the market position the Asian cell makers currently hold. In my opinion the only chance for Europe is in the production of specialized cells. The importance of starting cell production in Europe is in supply chain factors as well as in preserving technological knowhow.”

Complex financing

“Rapid technological developments in the cell industry makes financing very complicated,” said Oliver Nowak of IHS Markit as one of the many speakers during the Battery Experts Forum. According to this market intelligence provider “Electrification is here to stay. We can only discuss when and how fast the market will grow. The increase in cell production for the next five years is difficult to predict as we don’t know what the Chinese industry is planning for.”

‘Cell production in EU is all about financing’

Regarding production in Europe, Oliver Nowak pointed out “Cell production is a running investment with ROI (return on investment) of 5 years. After that term your production technology is outdated. Therefore, cell production in Europe is not about technology, but about financing. The fact that car mobility electrification is driven by governments policies to meet challenging CO2 targets, implies lots of uncertainties and makes investments in cell production even more dodgy.” While Nowak stated in his keynote that “Li-ion cell production is all about cars,” other speakers pointed out the importance of e-bikes. It was said that the e-bike industry has put more li-ion cells on the road than the automotive industry.

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