Energy storage for electric mobility – where does Germany stand regarding its goal of becoming a lead supplier?

In its study Energy storage – monitoring update 2016, the Fraunhofer Institute for Systems and Innovation Research ISI examines whether Germany has made any progress since 2014 towards its goal of becoming a lead market and lead supplier for energy storage systems for electric mobility. According to the study, which is part of the German Federal Ministry of Education and Research’s funding program “Battery 2020”, having made up lost ground, Germany has been able to stabilize its technological performance in lithium-ion batteries. The international viewpoint is also that high quality battery research is being done in Germany at the moment. Support should be continued to maintain this momentum and so that Germany might be able to turn its technology know-how into domestic battery cell production after 2020. Companies located along the value chain – from the mechanical engineering industry via component suppliers to system integrators – are now looking at the leading battery cell supplier countries of Japan, Korea and China.

The German government is continuing to pursue its goal of establishing Germany as a lead market and lead supplier for electric mobility. Battery systems play a major role here because they essentially determine vehicle design (e.g. driving range, costs, charging time, life time, and quality). Alongside electric passenger cars, these systems are also used in commercial vehicles and for stationary or mobile energy storage applications. Electric cars are the biggest and most dynamic battery market. They are driving innovation in both the further development of lithium-ion batteries (LIB) and “post-LIB” approaches (e.g. solid-state batteries).

The update of the “Energy Storage Monitoring Study“, funded by the Federal Ministry of Education and Research (BMBF), examines whether Germany is on the way to becoming a lead market and lead supplier in the field of battery technologies for electric vehicles. A lead market or lead supplier is characterized by demanded products that are produced domestically today or in the near future, successfully exported and achieve high domestic value added.

Germany’s position in batteries for electric mobility was documented in a comprehensive benchmarking based on 30 indicators and compared with globally leading countries – Japan, Korea, China, the US and France. Important indicators include research funding, publications, patents, battery production capacities and the sales figures of electric vehicles.

Germany is still not a lead market for vehicle batteries

Dr. Axel Thielmann, coordinator of the lead market study, comments on its results as follows: “Our studies show that Germany is still not a lead market for vehicle batteries – China leads here ahead of the US.“ According to Thielmann, these two countries have the largest global demand for electric mobility and therefore for lithium-ion batteries – among other things due to purchase and other market incentives. This is why these two countries also produce the most electric vehicles. Thielmann adds: “In the course of its growth dynamics, China will certainly expand its leading position in the future. However, Germany is also catching up in the demand for batteries; this is indicated when referring to current production forecasts and the electric vehicle models being announced.“

Japan’s industry continues to export battery cells on a large scale (50% global market share of the demand for car batteries, which was over 14 GWh in 2015) to the US among others. At the same time, production capacities are being built up in the sales markets by Asian cell manufacturers (e.g. Tesla Gigafactory, Panasonic). In contrast, China is exploiting its recently rapidly developed domestic capacities (in 2015, 30% or 4.2 GWh global market share for car batteries and demand for batteries with more than 11 GWh for commercial vehicles/buses). While the demand for vehicle batteries remains small in Korea, the country had the third largest global market share in battery production of almost 17% in 2015 and is a strong exporter like Japan. The market share of Korean battery producers is expected to increase in the future. Overall, China is the lead supplier. If R&D activities and exports were also included in the evaluation, then Japan would be the lead supplier.

Asian companies often cover the entire value chain 

Based on the current market structures, Asian companies often cover the entire value chain of vehicle batteries. Companies from Germany and the US only manage this at specific stages of the value chain. Germany also has significant shortcomings in the supply and trade with LIB-specific raw materials like cobalt, lithium, manganese and nickel. China traditionally dominates trade on this resource market.

In the fields of research and technology, Germany launched a catch-up process which was successful until 2014, has since lost momentum but has managed to maintain its level overall. Japan has been able to slightly expand its position as a technology leader while the dynamics of R&D activities in Korea and the US have slowed down. France has also caught up in battery R&D so that all the other countries have drawn closer to each other – with the exception of Japan as technology leader.

The Fraunhofer Institute for Systems and Innovation Research ISI analyzes the origins and impacts of innovations. We research the short- and long-term developments of innovation processes and the impacts of new technologies and services on society. On this basis, we are able to provide our clients from industry, politics and science with recommendations for action and perspectives for key decisions. Our expertise is founded on our scientific competence as well as an interdisciplinary and systemic research approach.

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