Germany Sees Increase in Battery Sales as Demand for Electric Cars Goes Up

1 ноября 2021, 17:36

Sustainability is one of the key themes in investing, and businesses around the globe are making changes. Germany, one of the leading technology nations, is aiming to be a climate change frontrunner. The government is thus actively pushing new technologies like solar cells or electric vehicles (EV) to reach net-zero emissions. 

Lithium-Ion Batteries Are Driving the Market

As the German government tries to get away from fossil fuels, EV sales are quickly increasing. Most of Germany’s leading car producers like Volkswagen are well on track to deliver EVs for the masses and are closing the gap to the American EV producer Tesla, which is currently the market leader. 

As the demand for EVs grows, so does the demand for batteries. According to data, growth in Germany’s battery sector doubled to 35% last year, with lithium-ion batteries accounting for the majority of the increase.

«Sales, especially of lithium-ion batteries, have grown enormously,» said Christian Eckert from the electronic industry association ZVEI.

The overall turnover in the battery market in 2020 was 5.9 billion euros ($1.09 billion). The lithium-ion segment used for EVs has seen a 63% growth to 3 billion euros. Besides EVs, people use those batteries in medical equipment, smartphones, electric bikes, and power tools.

Demand for lead-acid batteries, the second biggest segment, fell by 26% to 740 million euros. These batteries play a significant role in the car industry, for example, in onboard systems. Because combustion engine and forklift truck manufacturing sank during the COVID-19 crisis, demand has plummeted. Lead-acid batteries are also for emergency medical care and data centers. 

Manufacturers Need More Control over Battery Supply

German factories produce batteries, but most of the lithium-ion cells are imported from Asia. Imports from other European countries like Poland are also growing. German manufacturers produce batteries for domestic EV production and then re-export them to other European and international markets.

These cells are then turned into final battery products in a complete production chain. As battery production requires high-tech equipment and expert knowledge, Germany is an attractive location. The country has a long-standing history of sophisticated manufacturing. That’s also one reason why Tesla is about to open a production site in Germany.

German carmakers are increasingly acknowledging the need for their manufacturing facilities. Volkswagen, the world’s second-biggest carmaker, said they are vital to handle raw materials access and costs for EV battery cells, which, apart from lithium, include graphite, cobalt, and nickel. It has announced plans to build six battery factories across Europe by 2030.

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