Battery cells “Made in Germany”

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Daimler tried it once years ago—building a cell factory in Germany. But it threw in the towel in 2015. Now a new holding company called TerraE is giving it a try. Finally.

Germany’s Chancellor attended the groundbreaking ceremony for Daimler’s second battery factory in Kamenz, Saxony just a few days ago. The company plans to invest about a billion euros in the project as a “driving force behind change” to promote electromobility. The first batteries are supposed to roll off the production line starting in 2018. However, the battery cells will continue to come from the Far East, while the housing, control electronics and cooling system will come from Kamenz.

After burning its fingers with its own cell-production operation years ago, for the time being Daimler is sticking to a business model using cells from other sources. Despite the fact that the Chancellor would like to see “German” battery cells. And for a good reason: The battery accounts for a good one-third of the added value in an electric automobile, and the cell accounts for 60 to 70-percent share of that. Not to mention the fact that “Germany’s system expertise and future sustainability as an industrial location” are also on the line.

That is why at least a quarter of a billion euros in funding has been channeled into a number of projects over the last ten years to reduce the gap between Germany and Asia—including the collaborative GIGA-LIB project since 2015. Under the auspices of VARTA Microbattery GmbH, companies such as Manz AG, M+W Group, ThyssenKrupp System Engineering GmbH and the Baden-Württemberg Center for Solar Energy and Hydrogen Research (ZSW) are working on manufacturing techniques for a modular lithium-ion cell production operation. And the experts agree on one thing: Anyone who wants to succeed with cells needs plenty of staying power and money, lots of money.

Gigafactory for battery cells

The newly founded company TerraE Holding GmbH, which is based in Frankfurt/Main, appears to have both. The plan is to build a large-scale production facility for lithium-ion cells in Germany based on the manufacturing concepts of GIGA-LIB. The initiative was born as part of the Competence Network for Lithium Ion Batteries (KLiB), which involves 45 companies and institutes. TerraE’s founding partners are BMZ Holding GmbH, Europe’s leading manufacturer of industrial battery modules, Dr. Ulrich Ehmes, former CEO of Swiss battery manufacturer Leclanché SA, and Holger Gritzka, until now a manager at ThyssenKrupp System Engineering, who will take over management of the company. Carmakers and component suppliers are nowhere to be found.

Between now and 2028, production capacities are expected to increase gradually to 34 GWh/year. As far as the technology is concerned, the company will probably go with nickel-rich cathode materials (NCM523, NCM622) and silicon-based anodes. At least that was the recommendation of the majority of the KLiB members in the concluding report from the “Batterieforum Deutschland 2016” congress.

The business model will be that of a foundry, similar to that used in the semiconductor industry. Industrial partners and financial investors are taking care of financing.

TerraE will make various cell formats and address more than just the electromobility sector. After all, only a small portion of its batteries will end up there. The lion’s share will be used in garden equipment, drills, battery-operated screwdrivers and medical devices. Besides forklifts and delivery vehicles, it will also include hundreds of thousands of e-bikes. And there are still more batteries storing solar electricity than there are electric cars on our streets.


Battery cells from A123 Systems, China (Image: Porsche)

The battery cells for the Porsche 919 Hybrid come from A123 Systems in China. (Image: Porsche).