Germany is dipping into an economic aid fund to support the construction of a battery cells factory in the country by Chinese lithium giant Contemporary Amperex Technology (CATL), BEST Battery Briefing can reveal.
CATL confirmed last week it would invest EUR 240 million ($280m) to build the electric vehicle (EV) battery plant at Erfurt, in the east-central state of Thüringen.
Now officials in Thüringen have told BBB the state will invest EUR7.5m ($8.8m) in the project— set to start operations within three years— using regional economic aid provided by the national government.
And while Thüringen’s investment is minor, it flies in the face of European Commission plans to create an EU-run Batteries Alliance to combat Asian dominance in EV batteries— and indicates Germany will put national interests first.
The CATL deal was announced during talks in Berlin between German Chancellor Angela Merkel (right) and Chinese premier Li Keqiang (left).
The Erfurt plant expects production capacity to be 14 gigawatt-hours annually by 2022— providing batteries for companies including BMW, Volkswagen, Daimler, Jaguar Land Rover and PSA, CATL said.
Germany’s federal economic affairs and energy ministry declined to discuss the terms of the CATL project. A spokesperson said decisions on the use of regional aid were “the sole responsibility” of individual states.
Thüringen’s state government told BBB financial support was “allowed according to guidelines of the EU to support new investments (in for example buildings and machines)”.
Just hours after Merkel met Li, European Commission vice-president responsible for the ‘EU energy union’, Maroš Šefčovič, said in a speech in Brussels it was “crucial” for the bloc to support projects such as the Batteries Alliance— and “throw all our weight behind a strong European industrial policy”.
“China has secured seven times more EV investments than the EU in the last 12 months, according to recent reports,” Šefčovič said.
The summer edition of BEST Magazine— out now— includes a special feature on Germany’s role in Europe’s ‘lithium power play’ to develop an EU battery-making hub. Subscribe now to read it in print and online.