Electric Vehicle

Germany ramps up domestic EV battery production with state subsidies

Germany will be investing more than €1.5 billion in battery cell research and production, a key element in the country’s planned transition to clean energy and mobility. German Minister of Economic Affairs and Energy Peter Altmaier officially awarded the government’s first grant starting with a €300 million to the battery company Varta.

The funding is the first step in a new initiative set up under the European Union’s Important Project of Common European Interest (IPCEI) program. Along with Varta, four other companies with battery-cell projects in Germany will also be receiving grants from the Ministry of Economic Affairs and Energy, including BASF, BMW Group, Opel, and Umicore.

With a potential market value for European-made batteries of €250 billion by mid-2020s, according to the European Battery Alliance, and with lithium-ion batteries already accounting for approximately 40% of the value creation of electric vehicles, the German Government’s support for battery-cell projects could yield significant gains for the whole country.

“I therefore rely on an intelligent and efficient interaction of battery research, innovation and recycling. This brings innovative value chains and qualified jobs to Germany and Europe,” said federal minister of economics Peter Altmaier.

Germany is currently aiming at delivering 7 to 10 million electric vehicles to its roads by 2030, and government-backed incentives of up to €9,000 are available to those who purchase new EVs or hybrid vehicles.

Such support provides long-term stability for the growing EV market which, in turn, opens up business opportunities for German subsidiaries of foreign companies looking to expand their operations.

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