Germany has set aside 1 billion euros to support battery cell production: minister

BERLIN (Reuters) - The German government has set aside around 1 billion euros ($1.1 billion) to support battery cell production, and it aims to have 30 percent of such production coming from Germany and Europe by 2030, the economy minister said.

German Economy Minister Peter Altmaier arrives for a news conference of German Chancellor Angela Merkel following the Hesse state election in Berlin, Germany, October 29, 2018. REUTERS/Hannibal Hanschke

Germany, Europe’s largest economy, wants to reduce the dependence of its carmakers on Asian electric vehicle (EV) battery suppliers and protect jobs at home that may be at risk from the shift away from combustion engines.

Its car battery push, however, could be coming too late. Asian market leaders are ramping up output and some experts say there is a risk of a glut that could hinder the establishment of large-scale battery cell production by European newcomers.

Economy Minister Peter Altmaier said on Tuesday that Germany wanted to lay the groundwork in the months ahead for large-scale battery production in Europe and expected such production to start in Germany from 2021.

“Production should start as quickly as possible,” he said.

He said Germany wanted to work with other European countries and added that it was already in contact with France, Poland and Austria on the issue and is holding detailed discussions with certain companies.

He said there were interested parties for several consortiums on battery cell production and added that around 500 million euros could be necessary per consortium to start production.

Altmaier said that the sites for battery cell output would be decided on with the consortiums and that there would be more than one. The first production lines could be available from 2021 and each consortium is likely to provide 1,000 to 2,000 jobs at first, he said.

Altmaier said he expected the first concrete investment decisions at the end of the first quarter of 2019.

European Commission Vice President Maros Sefcovic said the battery market could be worth 250 billion euros annually by 2025.

Reporting by Rene Wagner; Writing by Michelle Martin; Editing by Thomas Seythal and Hugh Lawson