Ka Robert Habeck came to the opening and neither did Olaf Scholz: Almost unnoticed by the general public, the Chinese group CATL started producing battery cells for electric cars in Thuringia this week. CATL is by far the largest power storage manufacturer in the world, and the new factory in Arnstadt, south of Erfurt, is one of the largest Chinese direct investments in Germany.
The new plant is CATL’s first abroad. The groundbreaking ceremony was in October 2019, but the corona pandemic delayed completion. Now, more than three years later, the site is ready for operation: the company reported that the first batch of lithium-ion batteries came off one of the production lines under series conditions. CATL kept its word and started production in Arnstadt before the end of the year, as announced, said Europe boss Matthias Zentgraf: “We are working hard to increase production to full capacity.”
2000 new jobs
The factory will initially produce electricity storage devices with a total annual capacity of 8 gigawatt hours. Enough to equip around 75,000 luxury e-cars with batteries. The capacity is later to be expanded to 14 gigawatts. Overall, CATL wants to invest up to 1.8 billion euros in Arnstadt and create up to 2,000 new jobs in Germany.
Battery cell manufacturing is a high-tech industry in which the Chinese are world leaders in terms of technology. CATL imported the production equipment for the new plant from its home country to Germany, because Chinese companies have also been ahead in the construction of the special machines for the production of the power storage. At the same time, hundreds of CATL employees from China came to the small Thuringian town with 25,000 inhabitants to get production going and to train German workers.
Tricky timing
The Chinese investment of billions in East Germany is being completed at a delicate point in time: Economics Minister Habeck is preparing a new China strategy aimed at making the German economy less dependent on China. At the same time, the electricity prices in Germany have risen sharply as a result of the Ukraine war, which is a locational disadvantage for energy-intensive battery cell production.
Batteries are considered the most important component of electric cars, and so far European carmakers have been almost entirely dependent on suppliers such as China’s CATL and BYD, South Korea’s LG and Japan’s Panasonic. With their factory in Thuringia, the Chinese are ahead of the Germans: Volkswagen laid the foundation stone for its first battery cell factory in the summer. The plant in Salzgitter, Lower Saxony, is scheduled to go into operation in 2025.
On the other hand, the construction of a large electricity storage factory by the Swedish manufacturer Northvolt in Schleswig-Holstein Heide, which was announced in spring, has become uncertain. Northvolt may postpone the investment because of high subsidies in the US and expensive energy in Germany. The United States launched a large subsidy program in the summer with which they want, among other things, to bring battery cell factories into their own country. CATL also wants to build a plant there together with Ford.
