German executives are preparing to announce a new home for a lithium-ion battery plant designed to rival the output at Tesla Inc’s “Gigafactory.”
Terra E Holding GmbH will next month choose one of five candidate sites in Germany or a neighboring country to build its 34 gigawatt-hour (GWh) battery factory, Frankfurt-based chief executive officer Holger Gritzka said in an interview.
The former ThyssenKrupp AG manager has helped to assemble a consortium of 17 German companies and won government support for the project, which is to break ground in the fourth quarter of 2019 and reach full capacity in 2028, he said.
The battery factory is the latest sign that German industry, the motor behind the world’s fourth-biggest economy, is gearing up for a new stage in the energy revolution.
Lithium-ion batteries can help stabilize intermittent flows of wind and solar power on electricity networks. They are also projected to power millions of plug-in cars expected to roll off German production lines beginning early next decade.
“We have to be better in process technology than competitors, a constant step ahead,” said Gritzka, who emphasized that Terra E will be counting on Germany’s competitive edge in manufacturing robotics and automated production to make money.
Global battery-making capacity is set to more than double by 2021, reaching 278GWh, up from about 103GWh in the second quarter, according to Bloomberg New Energy Finance.
Asian technology firms, including South Korea’s LG Ltd and Samsung SDI Co currently control the market. Tesla is to become the world’s No. 2 battery maker once it finishes building its US$5 billion, 35GWh “Gigafactory” in Nevada, according to the London-based researcher.
Some of Terra E’s consortium members also might become its clients, said Gritzka, who declined to name companies participating.
The project, which won 5.2 million euros (US$6.2 million) in subsidies from the German Ministry of Education and Research, expects to need upwards of 1 billion euros before completion, Gritzka said.
Terra E will be seeking strategic investors that are attracted by the government-paid research embedded in Terra’s technology and German Chancellor Angela Merkel’s endorsement of the company, he said.
In May, Merkel broke ground at another 500 million euro plant to assemble lithium-ion energy-storage units for Daimler AG, which produces Mercedes-Benz and Maybach luxury cars.
Terra E will focus its batteries on stationary units, Gritzka said, adding that the project aims to tap an emerging market for mobile and non-automotive power and storage.
The bet rests on projected faster demand for lithium storage in the next decade.
Separately, Tesla on Wednesday calmed jittery investors, assuring them it could meet aggressive production targets for its new lower-cost Model 3 sedan.
CEO Elon Musk said investors should have “zero concern” about whether Tesla will be able to make 10,000 Model 3s per week by next year. Tesla just delivered the first 30 Model 3s to employees last week.
“This is maybe the best I’ve ever felt about Tesla, to be frank,” Musk said on a conference call with analysts and media.
That — along with a lower-than-expected net loss in the second quarter — sent Tesla’s shares soaring. They were up almost 8 percent to US$351.12 in after-hours trading.
Additional reporting by AP
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