Akasol opens Gigafactory: battery production made in Germany

Battery production is considered a key industry for the energy transition and electromobility. Europe is struggling to catch up with the market leaders from Asia, particularly when it comes to battery cells.

Today the battery manufacturer Akasol officially opened its fully automated production for battery systems in Darmstadt, the “Gigafactory 1“. Series production had already started in October of last year. The battery cells that are built into the systems come from, among others, the South Korean battery cell manufacturer Samsung SDI, with whom Akasol has signed a cooperation agreement until 2027.

Battery systems for buses, commercial vehicles, rail vehicles and ships are the main products of the company, which is 90 percent owned by the US auto supplier BorgWarner.

Battery and above all cell production is of great strategic importance for Europe as a business location and especially for the automotive industry in Germany. Battery production is considered a key industry in the fight against climate change and in the transition to electromobility.

Great strategic importance

The federal government wants to secure the technological sovereignty of Germany with this technology, it is said from the politicians. The aim is to cover the value chain of battery technology in Germany and Europe as completely as possible. The European Union and the Federal Government are therefore supporting industry with investments of billions.

Because until now, European automobile manufacturers have primarily sourced their battery cells from Asia. This leads to a structural dependency in a particularly sensitive and lucrative area. The heart of every battery is the battery cell, which also accounts for most of the added value, explains the Federal Ministry of Economics. In the case of electric cars, this is up to 40 percent.

Who does the billion dollar business?

“Both the demand and the production capacities for battery cells will increase tenfold worldwide by 2030 and will probably increase even more“, says Christian Hochfeld, director of Agora Verkehrswende. Together with the Fraunhofer Institute, the think tank wrote a study on Germany as a location for batteries. According to this, Germany will become the most important location for battery cell production in Europe over the next decade.

According to the Federal Ministry of Economics, the “European Battery Alliance” estimates the market potential for car batteries produced in Europe at up to 250 billion euros by the mid-2020s. As much as possible of these billions should flow into the coffers of German companies, according to the idea of ​​politicians and managers.

Electricity mix and carbon footprint

In addition to the economic balance, the ecological balance also plays a role. According to Hochfeld, the vehicle battery alone is responsible for 30 to 60 percent of all greenhouse gas emissions in the production of electric vehicles.

According to the study, cell production in Germany alone already provides an advantage over cell production in China, since greenhouse gas emissions in the local electricity mix are around 40 percent higher.

This has to do with the fact that power generation in China is still heavily dependent on fossil fuels. “With the further expansion of renewable energies in Germany, the CO2 emissions in the manufacture of battery cells will fall continuously,” the experts conclude.

New giant factories are being built

Finally, the corona pandemic is also likely to have heightened awareness of the vulnerability of global supply chains – another argument in favor of relatively local battery production. The Chinese battery manufacturer CATL is building a battery cell factory in Thuringia. With Samsung SDI and LG Chem from South Korea, CATL is one of the industry leaders in this market.

The car manufacturers are reacting: The VW Group wants to build six factories for the production of battery cells by 2030, In the future, Porsche will work with BASF on the production of battery cells. Daimler recently announced that it would start producing battery cells. Eight giant factories are planned worldwide, four of which are to be built in Europe.

Only BMW is going a different way. So far, the group is not planning its own factories for battery cells and is covering the needs of suppliers.

Providers position themselves

Of course, they too want to earn money from the electromobility business. Although Bosch does not offer its own battery cells for electric cars, it would like to be more represented in the factory equipment business in the future – and supply technology for building and assembling batteries.

Varta also wants to get into the business and build battery cells for use in electric cars in the future. The federal government, Bavaria and Baden-Württemberg provided the group with 300 million euros last year to support the expansion of battery cell production.

Akasol is already further and would even like to enlarge the new gigafactory for battery systems. Akasol boss Sven Schulz announced today that the already available capacity of one gigawatt hour (GWh) will be expanded to 2.5 GWh by the end of 2022. This makes Akasol the largest producer of battery systems for commercial vehicles outside of China.