A new market analysis by the Brussels environmental protection association Transport & Environment (T&E) predicts a bright future for electric vehicle battery production in Europe’s largest market.
T&E anticipates a nearly tenfold increase in European capacity between 2020 and 2055, from 49 to 460 gigawatt hours. Around half of this production is expected to take place in German factories, says T&E. The group says that European supplies could meet European demand as early as 2021.
Of the 22 gigafactories planned in the continent, ten will be located in Germany, with companies involved including Tesla, CATL and SVOLT.
The boom will be fueled by technological advances dramatically reducing the amounts of metals such as lithium, cobalt and nickel needed to make batteries, as well as billions in state subsidies that have seen the numbers of EVs purchased rise throughout the EU, for example by 260 percent in Germany in 2020.
Automakers are reacting accordingly. Ford says that by the year 2030 it will stop offering cars with conventional combustion engines for sale in Europe, while Porsche anticipates that by the end of the decade more than 80 percent of its models with be electric.
All of this is an incentive for companies to set up shop in Germany, explains Germany Trade & Invest senior automotive manager Stefan Di Bitonto.
“Germany is the heart of the European car industry so here is where the highest volume of batteries will be bought and sold,” Di Bitonto says. “The establishment of battery factories here will be a multiplier for companies supplying the big providers. That means opportunities for other firms to profit from the trend, as we have already observed in conjunction with Tesla and CATL.”