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Germany is facing a fight with China over the battery market

The federal government plans to invest about $ 1 billion to produce lithium-ion batteries in Germany. As is known, this sphere of production has been monopolized by Asian countries for many years: China, Japan and South Korea. However, Germany’s plans are ambitious: it is expected that by 2030 the share of batteries marked MADE IN GERMANY will reach 30% in the world market.

The first German batteries will come off the assembly line in 2021. Nonetheless, many economic analysts are skeptical about this venture. By the same date, China will produce up to 70% of all lithium-ion batteries in the world. Compete with a country where labor is many times cheaper than in Europe, will be quite problematic. Another equally important problem is the availability of raw materials for production. It is about cobalt, which is a key component of lithium-ion batteries. At present, the People’s Republic of China controls about 85% of the world’s reserves of this metal. In other words, the country secured its production in advance against possible competition. Germany has no such advantage, which also became an object for criticism.

However, the German government saved up a trump card. It plans to compensate for the lack of raw materials by the availability of developed technologies in the country. In particular, the capacity of Germany allows to extract up to 50% of the necessary raw materials by recycling batteries that have served their time. However, in this area, China is not far behind: the reuse of waste materials is gradually becoming a reality of this Asian country.

A number of market researchers are still positive about the idea of ​​producing batteries in Germany. This would greatly simplify the procedure for the transportation of finished products, would save customs duties and make Europe much more energy-independent. But at the same time it is not at all necessary that the factories belong to German owners. Chinese and Korean companies are willing to give big money to open their factories in Europe. This would kill two birds with one stone: it would reduce the cost of production and make it safer and more relevant to European standards.

It is worth to add that the inventor of a modern lithium-ion battery was John Gudnaf, a Briton of German origin. This happened at the University of Oxford in the late 80s. However, mass production began only when the Japanese company Sony purchased the rights to the invention.

Igor Konchakovsky

Photo source: pixabay.com

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