BMW invests millions in Erfurt’s major project
Author: Mario Schmidtgen
Chinese battery cell manufacturer CATL builds plant in Erfurt
At the moment, one of the largest battery cell factories in Europe is being built in Thuringia. On Monday, the Chinese manufacturer CATL (Contemporary Amperex Technology Ltd.) signed the contract for the major project. One the same day, the car maker BMW had awarded the first contract worth billions to the new plant. The company now hopes for orders from other German car companies as well.
The number of electric cars in Europe continues to increase. As a result, the number of required batteries and battery cells is also growing. Currently, companies such as VW, Daimler and BMW build their batteries from Asian cells themselves. Due to this fact, the Federal Government and the trade unions fear that they will be extremely dependent on the Asian suppliers and have been looking for a solution for the production of European cells for some time.
By 2022, CATL plans to invest around 240 million euros in the plant in Erfurt and to create around 600 new jobs. In the long run, the plant would even have potential for about 1,000 jobs. Angela Merkel, Federal Chancellor, described the day of contract signing as a very important event for Thuringia. At the moment the technology is only offered by Chinese companies, so that German car makers have no choice but to procure the products in Asia. “If we could do it by ourselves, I would not be sad,” Merkel said. She also said that it was especially good that the Chinese investor had chosen Germany as destination.
Wolfgang Tiefensee, Minister of Economic Affairs of Thuringia, describes the project as one of the most important industrial investments of the last ten years. This gives Thuringia the opportunity to “become one of the most important European locations for battery technology”.
With the plant in Thuringia, CATL is taking a first step into a future with battery factories outside of China after over one year of negotiations. The factory will then manufacture batteries with a capacity of 14 gigawatt-hours. The plans see the plant as an independent company with production, research and development.
CATL wants to emphasize the importance of the German market with the plant. In general, Europe is very important for the growth of the company. In addition to the planned location in Leipzig, the company already has a branch in Munich.
“By establishing the most modern technology for lithium-ion batteries in Germany and the local delivery options, we are closer to the customer and can thus offer customer specific solutions and respond even faster to customer requirements” said CATL CEO Robin Zeng. In the future, there would be the possibility of offering individually tailored solutions for automakers that suit to their needs. Another advantage is that CATL could also use European knowledge in production, as, for example, Germany is considered as the land of engineering. But in the production of battery cells China is at the top.
BMW, as first German car manufacturer, now wants to order battery cells worth four billion euros from CATL. From 2021 on, cells worth 1.5 billion euros shall come from the plant in Erfurt. From there, they would be taken to Dingolfing, around 400 kilometers away, where they would be converted into modules for the BMW i-next, a new all-electric BMW model. With the remaining 2.5 billion euros, BMW procures cells from a Chinese CATL plant.
BMW is the launch customer from the Thuringian CATL plant. Duesmann wishes that Daimler will also purchase in Erfurt in the future, so that the unit costs would decrease as a result of an increased production volume. BMW had the desire for a battery cell plant that is closer to its own factories for a long time. Thanks to subsidies, “political goodwill” and relatively low labor costs, this desire has now become reality. In return, BMW should have participated in the equipment of the CATL plant.
The plant in Thuringia is supposed to initiate the breakthrough of electro mobility in Germany. In addition, old battery technologies will be further developed at the new location and research on new battery technologies will be done. Thanks to its central location in Europe, the good infrastructure and the qualified staff, Thuringia is also the perfect location for the new CATL factory.
According to Robin Zeng, CATL chief executive, the investments in Thuringia are only a first step. In the long run, the company wants to supply all European car manufactures with lithium-ion batteries and provide them with power storage systems for energy from environmentally friendly resources.