BASF SE is prepared to dig deep, pouring money and expertise into developing materials for electric-vehicle batteries to catch up with rivals such as Tesla Inc supplier Sumitomo Metal Mining Co.
The world’s No. 1 chemical maker is accelerating its expansion in Europe, which is emerging as the next high-growth region for batteries, said Ken Lane, BASF’s global head of catalysts. Battery makers in the market currently rely on Asian suppliers such as Sumitomo that provide nickel and lithium, and have started recycling batteries.
“We are the largest chemical supplier to the automotive industry, and this is the biggest opportunity that we see in that space today,” Lane said in a telephone interview. “Asia has been the growth story until now and will continue to grow, but Europe is also going to be growing very fast over the next decade.”
The Germany-based company is already building a 400 million euro (US$491.14 million) factory in Europe to make cathodes from a concoction of elements that determine the battery’s strength and lifespan.
Work has yet to begin on the plant, but BASF is already looking ahead to additional projects, Lane said.
BASF will “position itself with assets” in Europe, Lane said, declining to give details.
As well as increasing capacity to deal with a ramp-up in electric-vehicle production, having operations on the ground helps attract and retain the scientists needed, which is currently “very difficult,” he said.
Suppliers and automakers are honing plans to meet stringent emission regulations in Europe that have triggered record spending to develop battery-powered model lineups. The shift to electric vehicles has been a learning curve for parts makers and auto companies alike, which have struggled with the high cost of batteries and unattractive products failing to rouse much of a consumer response.
Global sales of battery vehicles — both plug-in hybrids and wholly electric cars — are expected to reach 8 million units in 2025, up from about 1 million last year, Liberum analyst Adam Collins said.
While most automakers plan to introduce electric models from next year, moves for a battery-cell industry in Europe have remained vague amid previous failed attempts.
German chemical company Evonik Industries AG exited its battery venture Li-Tec in 2014, selling its stake to Daimler AG.
Demand for electric vehicles was insufficient and keeping up with the industry’s rapid development carried too much risk, the company said at the time.
Daimler ceased making cells a year later.
“It’s the chicken-and-egg thing here,” Lane said. “If you don’t have the materials, you’re not going to have the batteries.”
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