France and Germany have asked the European Commission to approve state subsidies for a cross-border battery cell consortium.
The plans would involve PSA Group and its German subsidiary Opel, as well as Total’s Saft, according to German publication Frankfurter Allgemeine Zeitung(FAZ). The economy ministries of both countries sent a letter of intent to the European Union's executive body asking Brussels to quickly give its permission for the plan.
An estimated €1.7 billion has been earmarked by the two countries to support company alliances that would reduce European carmaker dependence on Asian suppliers and protect jobs as the industry shifts away from the internal combustion engine.
‘We are now waiting for Brussels to give us the green light,’ the German economic ministry said, confirming an earlier report by the FAZ newspaper.
German Economy Minister Peter Altmaier will meet French counterpart Bruno Le Maire in Paris next month to discuss the matter, aiming to make progress with forging further battery alliances.
The FAZ report said that the PSA/Saft alliance was planning to convert an Opel factory in Kaiserslautern, western Germany, close to the French border, into a battery cell production site.
Economic ministries are being inundated with applications for funding to establish battery production facilities. Among more than 30 companies that have asked Germany for such help are carmakers Volkswagen and BMW, as well as German battery maker Varta and Swedish battery manufacturing startup Northvolt.
In March, VW joined with Northvolt and other partners to form the European Battery Union (EBU), which will look to forge ahead with battery research throughout Europe.
The joint research activities of the EBU will cover the entire battery value stream from raw materials through cell technology to recycling. The prime objective is to accumulate much broader know-how in battery cell production.
All the partners will step up their investments as a result of the planned additional research activities. These investments could receive financial support from funding announced by the German Federal Ministry for Economic Affairs and Energy.
Last year, BMW, Northvolt and Umicore announced the formation of a ‘joint technology consortium’ to work together on a value chain for battery cells for electrified vehicles in Europe.
Saft, a 100-year-old French company, owned by energy company Total, produces a range of batteries for industrial applications. It has joined forces with German industrial group Siemens, electronic components specialist Manz, Belgian chemicals group Solvay and Belgian material group Umicore to develop a new generation of batteries for electric vehicles.
Carmakers are currently sourcing batteries from Asia but this will become unsustainable as the number of EV models and production levels increase.