Germany's car industry can't build its own batteries

[mspohr]

Germany’s car industry can’t build its own battery cells

The sad history of German failure to make batteries.

"Cells can be a major technology differentiator and cells are the by far most costly part of the battery pack,” he told The Verge. In his view, a large scale production of battery cells by European or German companies will be crucial for the continent “for keeping its chances in taking part in an enormous and rapidly growing market.”

So Merkel’s new government, formed in March 2018, put the topic high on the agenda by including it into its coalition agreement. “Can it go well if we, as a continent that produces cars, buy battery cells from Asia and the digital infrastructure of a car from somewhere in Asia or America?” Merkel asked this June. She urged German automotive companies to start a race to catch up. But so far, they haven’t.

 

[Gargantuar]

This is very likely the reason German automakers do not want to produce and sell EVs, their profit would be low (and canibalizing an ICE sell which brings in a decent profit).

 

[Kren]

This is very likely the reason German automakers do not want to produce and sell EVs, their profit would be low (and canibalizing an ICE sell which brings in a decent profit).

I am not so sure about that. Supposedly some manufacturers like Mercedes will come out with a electric version for all classes starting year 20/20. I think it was reported that some have seen an unmarked Audi electric test car in Germany. Also, I saw the article myself (I can try and find if you want) that some investors want put charging stations every few kilometers along one of the North/South autobahns. I think the Germans auto manufacturers are being sneaky. They are keeping things under wrap until ready and then they will explode on the market.

 

[mspohr]

I am not so sure about that. Supposedly some manufacturers like Mercedes will come out with a electric version for all classes starting year 20/20. I think it was reported that some have seen an unmarked Audi electric test car in Germany. Also, I saw the article myself (I can try and find if you want) that some investors want put charging stations every few kilometers along one of the North/South autobahns. I think the Germans auto manufacturers are being sneaky. They are keeping things under wrap until ready and then they will explode on the market.

Actually, it's just the opposite. The German auto manufacturers have been heavily promoting their EV concept cars and prototypes for years but haven't actually been producing any real cars that you can buy (only exception is the BMW i3 wierdmobile).
I think we all would like to see some real competitive EVs from Germany but they're 10 years behind.

 

[Valore]

Actually, it's just the opposite. The German auto manufacturers have been heavily promoting their EV concept cars and prototypes for years but haven't actually been producing any real cars that you can buy (only exception is the BMW i3 wierdmobile).
I think we all would like to see some real competitive EVs from Germany but they're 10 years behind.

What are you talking about?
BMW i3 and VW E-Golf are outselling Tesla Model S and X combined in Europe.
Even the Mercedes Smart EV is outselling Tesla Model S and X.
Porsche Taycan, Audi E-Tron, Mercedes EQC, BMW iX3 are coming to market soon, they are going to be a huge hit.
The Germans are coming to market when it's profitable. EV are still just around 1% of the global market. So relax, the Germans certainly will come strong when there is profit to be made.

 

[lklundin]

This is very likely the reason German automakers do not want to produce and sell EVs, their profit would be low (and canibalizing an ICE sell which brings in a decent profit).

Hardly.

For their ICEs, German automakers rely on (highly specialized) suppliers for non-trivial parts like transmissions.
So it would represent no change for them to get f.ex. electrical motors from Bosch.

However, there are no competent, large scale German suppliers of battery cells, and there seems to be at most wholly insufficient steps taken to improve on that.

But it is true for any traditional automaker that BEVs may cannibalise the existing ICE sales.

PS. While the German automakers have some chance of surviving the transition to BEVs, the above mentioned highly specialized suppliers of e.g. transmissions are absolutely screwed. This represents a quite serious problem for Germany.

 

[mspohr]

What are you talking about?
BMW i3 and VW E-Golf are outselling Tesla Model S and X combined in Europe.
Even the Mercedes Smart EV is outselling Tesla Model S and X.
Porsche Taycan, Audi E-Tron, Mercedes EQC, BMW iX3 are coming to market soon, they are going to be a huge hit.
The Germans are coming to market when it's profitable. EV are still just around 1% of the global market. So relax, the Germans certainly will come strong when there is profit to be made.

Thanks for the information. EGolf looks strong.

 

[ggr]

What are you talking about?
BMW i3 and VW E-Golf are outselling Tesla Model S and X combined in Europe.
Even the Mercedes Smart EV is outselling Tesla Model S and X.
Porsche Taycan, Audi E-Tron, Mercedes EQC, BMW iX3 are coming to market soon, they are going to be a huge hit.
The Germans are coming to market when it's profitable. EV are still just around 1% of the global market. So relax, the Germans certainly will come strong when there is profit to be made.

"Even the Mercedes Smart EV is outselling Tesla Model S and X." -- Not according to your own table.

 

[Kren]

Hardly.

For their ICEs, German automakers rely on (highly specialized) suppliers for non-trivial parts like transmissions.
So it would represent no change for them to get f.ex. electrical motors from Bosch.

However, there are no competent, large scale German suppliers of battery cells, and there seems to be at most wholly insufficient steps taken to improve on that.

But it is true for any traditional automaker that BEVs may cannibalise the existing ICE sales.

PS. While the German automakers have some chance of surviving the transition to BEVs, the above mentioned highly specialized suppliers of e.g. transmissions are absolutely screwed. This represents a quite serious problem for Germany.

If anyone can work it out...the Germans will. They always do

 

[Kren]

Actually, it's just the opposite. The German auto manufacturers have been heavily promoting their EV concept cars and prototypes for years but haven't actually been producing any real cars that you can buy (only exception is the BMW i3 wierdmobile).
I think we all would like to see some real competitive EVs from Germany but they're 10 years behind.

I agree we need Germany to step up and provide some real competition. I have faith in Germany, I really hope it is only 3-5 years behind. I like Teslas but they are lot of money with no real luxury feel. With Germany on their backs I am sure that will change. Well, just my opinion.

 

[Lon12]

Looks like it was just bad timing for Electrovaya then:
Germany unit of Canadian lithium battery company Electrovaya declares insolvency

Electrovaya acquired Germany-based Litarion GmbH, a joint venture between Daimler and Evonik, last year to boost its global presence and compete with larger players such as Tesla.

 

[mspohr]

Looks like it was just bad timing for Electrovaya then:
Germany unit of Canadian lithium battery company Electrovaya declares insolvency

Electrovaya acquired Germany-based Litarion GmbH, a joint venture between Daimler and Evonik, last year to boost its global presence and compete with larger players such as Tesla.

Looks like Germany is slow on the uptake again.
Electrovaya Inc. says its Litarion subsidiary in Germany has begun insolvency proceedings as a result of a cash shortage that arose after its automotive customers took longer than expected to place large battery orders.

I'm sure they could do it but they are reluctant to give up their investment in ICE technology. Hopefully they'll come around before it's too late.

 

[Lozza12]

What are you talking about?
BMW i3 and VW E-Golf are outselling Tesla Model S and X combined in Europe.
Even the Mercedes Smart EV is outselling Tesla Model S and X.
Porsche Taycan, Audi E-Tron, Mercedes EQC, BMW iX3 are coming to market soon, they are going to be a huge hit.
The Germans are coming to market when it's profitable. EV are still just around 1% of the global market. So relax, the Germans certainly will come strong when there is profit to be made.

No, you’re engaging in wishful thinking. Your point is actually that German car buyers are patriotic not that there are so many German EVs.

I think the Germans are at the same level as US and Japanese automakers - complacent, overly reliant on the status quo, huge vested interests/ potentially stranded assets, lobbying politicians hard to keep things favouring FF and engaging in deceptive behaviour.

These are not the signs of an industry ready to disrupt itself and “explode” onto the EV scene.

Audi and BMW may well produce some very sexy high-end EVs, but I doubt they will ever make more than 30,000 per year due to insufficient battery supply.

The Germans think they can buy Chinese batteries from CATL for a few years, without realising that those few years are all the Chinese need to copy German auto bodies/ideas and then beat them at their own game and at half the price.

I don’t think Tesla is the only game in town and they can’t be realistically, but right now it’s 40-Love to Elon and China, and almost at match point.

 

[Kren]

Just wondering where is Sonnen Batterie??? Before Tesla, Sonnen was the top of the line solar energy storage solution if one had loads of money. I wonder why they are not getting in the EV game?

 

[Canuck]

I think the Germans auto manufacturers are being sneaky. They are keeping things under wrap until ready and then they will explode on the market.

Now that gave me a good laugh.

As to that graph, seriously? No one sees the glaring error and wrong path you were lead down with that irrelevant data? Two words: Tree hugger (cars). Two more words: Limited market (not the big kahuna). It isn't EV vs EV that's got the German's nervous -- so why post that graph? It's EV vs. ICE where the game changer lies!!!

So, with that in mind, here's the real concern for the Germans:

Tesla Model S outsells German luxury flagships in Europe

Tesla Model S Crushes Large Luxury Car Competition In USA | CleanTechnica

And now the 3 -- just out of the gate:

Tesla Model 3 Outselling Mercedes-Benz C-Class and BMW 3-Series in California | News | Car and Driver

And everyone around the world wants in on this game -- not just us nutty tree huggers!

And don't get me started on the supercharger network because that's really where it's at. Who is going to buy a long range EV without banks of maintained fast-chargers on all well traveled routes, and even the not so well traveled ones? A long range EV you can't take anywhere without relying on public chargers? No thanks. Been there before the supercharger network and never going back. And another fast charging, well maintained, with tons of banks of fast-chargers will not be built overnight and "explode on the market". But some here probably want us to believe the Germans are doing that too, being sneaky, without us knowing...

The Germans are coming to market when it's profitable. EV are still just around 1% of the global market. So relax, the Germans certainly will come strong when there is profit to be made.

Relax? We want more choice and we want it NOW.

But beyond that, there's no concern at all, according to your view? To me, that's like telling the horse carriage makers there's no concern when the ICE came along, since they were still profitable, and wait to get into making them on any real scale (i.e. batteries by way of a giga factory is needed -- in Europe or buy from Asia or maybe Elon -- if he has any spares which looks to be unlikely). But no, look the other way. There's lots of time. People love horses. That's how I read your post. Looking in the rear view mirror instead of through the windshield. Not a good business strategy, in my view at least.

 

[David99]

There is also a risk in producing your own batteries. You have to build a very large and costly production facility and set up a supply chain. Huge investment. If there is a major breakthrough in battery technology your massive production becomes a burden. If you get them from a supplier, you can just switch to another supplier. BMW has many of their engines produced entirely from a different company in Austria. It is very common to have others produce for you. How much does Apple produce themselves? Apple is a brand selling devices and they can go to any manufacturer and get the best deals. If one of their products doesn't sell well or a technology becomes outdated, they don't have to worry one bit about having a huge production facility/machines/material supply investment locked into a specific product or technology.

 

[Canuck]

If you get them from a supplier, you can just switch to another supplier.

No you can't. Tesla was buying all that Panasonic could produce and there was no one else to "just switch to". We're not talking about a computer maker needing batteries that can shop around. Tesla need thousands of cells per vehicle (approx 8,000!). That's what lead to the giga factory: battery supply constriant. That's also exactly what's making the Germans nervous about falling behind -- and rightly so. But even if you can "shop around" do you want to be buying the biggest part of the car you're making from suppliers? That sounds like a bad business strategy to me. The great German automakers, masters of the ICE, throw in the towel and rely on suppliers when it comes to the biggest component of an EV. That doesn't sound good to me but that is the current path they are on.

 

[David99]

No you can't. Tesla was buying all that Panasonic could produce and there was no one else to "just switch to". We're not talking about some laptop maker needing batteries that can shop around. That's what lead to the gigs factory: battery supply constriant.

I know. The only way to make it happen for Tesla was to produce batteries in large numbers was to do it themselves. That was before anyone else wanted to make EVs. Now things have changed and everyone wants in. There will be plenty of battery suppliers in the next 10 years.

 

[FlatSix911]

Germany’s car industry can’t build its own battery cells The sad history of German failure to make batteries.

"Cells can be a major technology differentiator and cells are the by far most costly part of the battery pack,” he told The Verge. In his view, a large scale production of battery cells by European or German companies will be crucial for the continent “for keeping its chances in taking part in an enormous and rapidly growing market.”
So Merkel’s new government, formed in March 2018, put the topic high on the agenda by including it into its coalition agreement. “Can it go well if we, as a continent that produces cars, buy battery cells from Asia and the digital infrastructure of a car from somewhere in Asia or America?” Merkel asked this June. She urged German automotive companies to start a race to catch up. But so far, they haven’t.

Interesting reading ...

This spring, Bosch, Germany’s biggest and most important supplier of car components, completely scrapped its ambitious plans to build a cell factory. The second-largest supplier, Continental, doesn’t completely rule out entering the production of battery cells, but hasn’t made any announcements about it, either. Nor have the car manufacturers themselves.

Some months ago, Daimler CEO Dieter Zetsche took the position that with today’s technology, it doesn’t make sense for a German manufacturer to build battery cells. “We know what we’re talking about,” Zetsche said, referring to the unsuccessful project in Saxony.

 

[mspohr]

GM Postpones Buick Velite Launch In China Due To Battery Supplier Quality Issues

One of the pitfalls of relying on others to make your batteries.