Date: Mar 20, 2019

The German government is putting up €1bn (£870m, $1.1bn) in subsidies to support national companies developing battery cell production in Germany, and national carmakers are keen for a slice of the money.

More than 30 companies have already applied for subsidies, Reuters reported on 18 March. Germany’s economy minister Peter Altmaier said the response “has far exceeded our expectations.” The government could decide how to allocate the aid by this summer.

Volkswagen (VOW.DE) is among the big names applying for the state support, as are BMW (BMW.DE), chemicals giant BASF (BAS.DE), and battery maker Varta (VAR1.BE). Reuters’s sources said that up to six consortiums could be formed, which may also include French and Polish companies.

Automobile production is moving into the highly competitive era of electric cars and the German government is concerned that the country’s mighty automotive industry may become too heavily reliant on battery makers from China, South Korea, and Japan.

China’s biggest battery maker, Contemporary Amperex Technology (CATL), was given approval to build a giant battery cell factory in the German state of Thuringia in July 2018, which is slated for completion in 2021. Daimler (DAI.DE) has already signed a multibillion-euro battery contract with CATL, and BMW said it would buy €4bn (£3.4bn, $4.5bn) worth of battery cells from the new factory.

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