Europe now building its own battery gigafactories
New move challenges Tesla’s lead
Battery-making gigafactories are about to arrive in Europe, challenging a lead Tesla is building at a plant in Nevada and opening the way to a faster shift towards green power for both cars and utilities.
German Chancellor Angela Merkel this week broke ground at a
500 million ($797m) plant to assemble lithium-ion energy-storage units for Daimler, which produces MercedesBenz and Maybach luxury cars.
The facility south of Berlin highlights a push by major carmakers and power firms into energy storage. The technology is crucial to drive the next generation of green vehicles and to hold electricity from wind and solar farms for when it’s needed most.
With two dominant industries moving in the same direction, the cost of batteries is likely to plunge quickly, says Bloomberg New Energy Finance.
“As battery costs fall and their energy density increases, we could see cheaper battery-electric cars than their fuel-burning equivalents by 2030,” says Nikolas Soulopoulos, an analyst with the London- based research arm of Bloomberg.
Global battery-making capacity is set to more than double by 2021 to 278 gigawatt-hours, up from about 103 gigawatt-hours now, says BNEF.
Large-scale factories planned in Sweden, Hungary and Poland, as well as Daimler’s battery assembly plant
As battery costs fall and their energy density increases, we could see cheaper battery-electric cars than their fuel-burning equivalents by 2030 Nikolas Soulopoulos, Bloomberg New Energy Finance
in Germany, are expected to feed demand from carmakers, cutting the cost of lithium-ion packs by 43 per cent, the researcher estimates.
For the utilities, cheaper batteries reduce the cost of storage units that smooth the variable flows of electric power to the grid from renewables.
Used since the early 1990s in consumer electronics such as computers and phones, lithium-ion batteries have made a leap into the transport and power industries. But because of their cost, their application on the grid and in cars is only now starting to spread.
The battery boom will be most evident to consumers in electric vehicles, with most major carmakers planning plug-in models by the middle of next decade.
Currently, electronics makers in Asia control the battery business, and Asia is expected to maintain its lead, with an additional eight factories being constructed in China alone.
Daimler’s factory would be the biggest yet in Europe, responding to Tesla’s US$ 5 bill i on ( $ 7. 1b) Gigafactory venture with Panasonic. At Daimler, batteries will feed both its cars and a venture with rooftop solar installer Vivint Solar, to produce home energy storage systems.
Tesla’s plant would make the California carmaker the No 2 supplier behind LG, and Tesla is also planning to build additional gigafactories.
Volkswagen is in talks with battery makers and plans a prototype assembly plant in Germany. A Stockholm-based start-up has also announced plans for a ¤ 4b battery factory in Sweden by 2023.
Producing more lithium-ion units for cars will help cut battery costs, making storage more affordable in homes and on the grid.