First German battery cell factory could arise abroad
The German battery cell consortium TerraE is about to decide on its first production site. Apparently, not only German cities are in the race for the plant.
At a planning meeting last week, the shareholders of TerraE discussed the future distribution of tasks in their consortium. They want to decide shortly where TerraE builds its first battery cell factory. It will deliver lithium-ion cells for the industry from autumn 2019 onwards.
"We are in the location process and have held talks in several European countries," says TerraE CEO Holger Gritzka on request of the magazine bizz energy. Where the factory comes from, TerraE will announce within the next 14 days. Finland is considered as a possible location
Gritzka does not confirm that the choice falls on Germany, as reported by the media in spring. A Finnish newspaper recently wrote about TerraE talks with the city of Vaasa on the Gulf of Bothnia. Gritzka affirms that Finland belongs to his stations on the site search.
That does not have to mean that Germany is out of the race. The consortium, which brings together more than a dozen companies and research institutions, aims to build a production capacity of 34 gigawatt hours by 2028. It could spread it to several places in Europe.
3,000 jobs could be created
Initially, a factory with a capacity of 1.5 gigawatt hours is to be built by 2021. Per gigawatt hour TerraE must invest between 100 million and 150 million euros and hire 90 employees. Thus, the company would need around 140 employees for the first stage and would have to invest up to 225 million euros. In the long term, TerraE expects 3,000 employees and around four billion euros in investment costs.
According to the commercial register, the business purpose of the Frankfurt-based holding company is not only the founding of the production company, but also the purchase and sale of participations. If successful, TerraE could become an international battery cell conglomerate.
BMZ from Hessen plays a key role
Who currently belongs to the circle of donors, does not betray Gritzka yet. There is a steady increase in investors, he says, and the next capital increase is planned within four weeks. One of the most important participants is the internationally producing battery manufacturer BMZ from Karlstein in the Hesse. He is a founding shareholder - alongside former ThyssenKrupp manager Gritzka and Ulrich Ehmes. Ehmens came from the Swiss battery manufacturer Leclanché to the Frankfurt-based holding.
Well-funded TerraE investors are likely to be included in the battery cell research initiative "Fab4Lib". It is headed by TerraE and funded by the Federal Ministry of Research with 5.5 million euros. Amongst others, Siemens, the DHL subsidiary Streetscooter, SGL Carbon and ThyssenKrupp System Engineering are taking part in "Fab4Lib".
Cells for car batteries only in the second step
Although the automotive industry is the largest consumer of lithium-ion batteries in the long term, TerraE will initially focus on cells for forklifts and other industrial distribution vehicles, battery-powered power tools, stationary storage systems and e-bikes. Later, cells for car batteries should run off the assembly line. If the American electric car pioneer Tesla build his vehicles in Europe in future, TerraE can also supply him, says Gritzka.
When the German newbie hits the market at the end of 2019 with the first mass-produced products, he encounters powerful competition: Asian manufacturers such as Panasonic, BYD and LG Chem dominate the cell market. In Nevada, Tesla is building a gigafactory for lithium-ion cells and battery packs.
Creating value is not left to Asia and the US alone
But the market is growing. Gritzka believes that TerraE will be able to compete with the large, much more developed competitors: "Lithium-ion cells are produced in high-tech countries such as Japan, South Korea and China. With a similar degree of automation and similar economies of scale, there are no immense cost differences with Europe. "In addition, logistics costs for overseas import and customs costs were eliminated.
The 50-year-old manager warns against leaving the value added to battery cells Asia and the United States. Then Europe would fall behind in a key technology. "In addition, we must ensure that we can obtain the necessary raw materials," says Gritzka. "The path that China takes to securing lithium deposits abroad should also be an option for Germany." TerraE signed a letter of intent for the purchase of graphite in the fall with the Australian company Magnis Resources. (Also read: China goes into the lithium offensive)
Lithium price could rise
With all 26 battery cell factories under construction in the world ramping up production, the lithium price will rise significantly in the coming years. This predicts the battery raw materials specialist market research firm Benchmark Minerals in London. Accordingly, the growing demand for batteries has pushed prices for lithium and cobalt up by at least one third last year.
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