May 8, 2018 / 6:25 PM / in 10 months

Germany's Merkel sees chance for electric car battery production in Europe

BERLIN, May 8 (Reuters) - German Chancellor Angela Merkel signalled on Tuesday that she thought the chances were increasing of German carmakers building up battery production for electric cars in Europe.

Europe has no significant production of the constituent cells of battery packs - a market currently dominated by a handful of firms including China’s and Korean rivals LG Chem and Samsung.

“I’m detecting a certain rethink among carmakers,” Merkel said at an event in Berlin hosted by the National Academy of Science and Engineering, known as acatech.

She said she backed a call from Henning Kagermann - the academy’s outgoing president - who said Europe needed such battery production.

Merkel argued that battery production would form a significant part of the value-added chain for electric cars, so if Europe lacked a home-grown battery industry, it would have a smaller share in the value-added chain of the car industry in future.

She said it might still be possible to “achieve something” in Europe in this field but added that businesses would need to be willing.

Merkel said she was in favour of doing more for Germany as a research location and boosting innovation there.

She pointed to the government’s intention to raise the proportion of research and development spending in Germany to 3.5 percent of economic output by 2025, adding that the automobile industry played an important role in that.

Last month, Economy Minister Peter Altmaier said the German government was ready to offer support to the makers of batteries for electric vehicles, adding that one possibility might be to exempt them from some energy levies.

Volkswagen-owned truckmaker Scania said in January it would invest 10 million euros in a 4 billion euro ($4.75 billion) project to build Europe’s biggest battery cell plant in northern Sweden. ($1 = 0.8418 euros) (Reporting by Gernot Heller Writing by Michelle Martin; Editing by Adrian Croft)

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