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Nikkei: Chinese makers of EV batteries curtailing production plans in Germany as EV purchases falter

The Nikkei reports that Chinese makers of electric vehicle batteries are curtailing their production plans in Germany as falling EV purchases in Europe’s largest auto market hamper their sales.

  • SVOLT Energy Technology will halt plans to build a battery cell plant in Lauchhammer in eastern Germany’s Brandenburg state, citing what it called the "new European strategy" and the cancellation of a large customer order. German public broadcaster SR reported the customer was BMW.

  • SVOLT also cast doubt on plans to build a battery cell production factory in Ueberherrn in western Germany’s Saarland state, citing lawsuits against the project.

  • CATL scrapped plans to expand its first cell plant outside China in the eastern German town of Arnstadt, where production began in early 2023. That decision came after Volkswagen stopped producing electric vehicles in eastern Germany’s Zwickau due to a lack of demand. Instead, CATL plans to set up a new plant in Hungary.

The rationale for Chinese companies to invest in battery production in Germany was weakened greatly by Berlin’s abrupt move in late 2023 to cancel buyers’ subsidies for EV purchases as an emergency measure to plug a fiscal hole.

As a result, the share of electric cars in all new registrations fell by 2.5 percentage points on the year in April to only 12.2%. Gasoline vehicles still had, by far, the largest share of new registrations in the country at 37.3%.

Comments

Jer

Frustrating.
Another example of all-or-nothing environmentalism. Government Nanny-ism and punitive regulation and single-minded rebate-bribing -- gone horribly Wrong. Now we have reduced capacity and diminished production and likely, reduced research and technological development in all things battery and electric-propulsion.
You would figure that with even such left-obsessed, hyper-bureaucratic, and obsessively-humano-centric places like northern/ western Europe, they would understand moderation, compromise, progressive execution, and steady commercial-industrial development - which means a wide range of plug-in, fuel source, and reduced fossil-fuel development, not pure EV decades before we're ready, in small-and-uninspiring vehicles at large-and-uninspiring prices. It will be interesting to see if the US goes down the same road, pulling-the-plug as it were (pun very much intended) on a lot of electrical propulsion and battery development and therefore reducing overall vehicle numbers. Perhaps, many environmentalists will cheer this market failure on - as they prefer a world of no cars to a world where EV doesn't fully take hold and it's still a mix of ICEs, PHEVs, and EVs for decades -- until they realize the massive socio-economic hit of such a loss and the huge reduction in quality-of-life that comes from that in all things from jobs to products to services - like an eastern Europe country. It's tempting to allow people to live in such a delusion that it is better to have a Green-and-Poor world than a Rich-and-Dirty one. Time will tell and western Europe is likely to learn that first.

Bernard

Jer,

You may be reading too much into this. One battery maker decided to build their plant in Hungary instead of Germany. Another cancelled a plant because an order was cancelled. There's also a plant that is delayed by litigation (which is not something exclusive the battery plants).
None of these are unusual. Even when grouped into one article they aren't unusual. You should know that other plants are being built elsewhere in Europe, including in Germany. Plants are also going up in North America and Asia.

SJC

I'm not convinced electric car sales are faltering they're comparing fourth quarter last year with first quarter this year there are tax incentives that might make fourth quarter sales increase they should compare it with first quarter 23 to first quarter 24

Roger Brown

A more gradualistic approach to emissions reductions is certainly more economically conservative than an attempt to aggressively push a short term conversion to an electrified transportation system. However it is not clear that such a gradualistic approach can stave off economic disaster caused by the economic externalities of climate change. The aggressive promotion of electric cars is still a fundamentally "conservative" strategy which assumes that the paradigms of high performance high use automobiles and private credit markets (for which the process of turning money into more money at an exponential rate is the most fundamental measurement of societal health) must be preserved. The question in my mind is whether or not these paradigms and an ecologically intelligent human society are consistent with one another.

Samuel Butler in "God the Known and God the Unknown" wrote:

"MANKIND has ever been ready to discuss matters in the inverse ratio of their importance, so that the more closely a question is felt to touch the hearts of all of us, the more incumbent it is considered upon prudent people to profess that it does not exist, to frown it down, to tell it to hold its tongue, to maintain that it has long been finally settled, so that there is now no question concerning it...

Almost any settlement, again, is felt to be better than none, and the more nearly a matter comes home to everyone, the more important is it that it should be treated as a sleeping dog, and be let to lie, for if one person begins to open his mouth, fatal developments may arise in the Babel that will follow...

The discovery that organism is capable of modification at all has occasioned so much astonishment that it has taken the most enlightened part of the world more than a hundred years to leave off expressing its contempt for such a crude, shallow, and preposterous conception. Perhaps in another hundred years we shall learn to admire the good sense, endurance, and thorough Englishness of organism in having been so averse to change, even more than its versatility in having been willing to change so much...

Nevertheless, however conservative we may be, and however much alive to the folly and wickedness of tampering with settled convictions-no matter what they are-without sufficient cause, there is yet such a constant though gradual change in our surroundings as necessitates corresponding modification in our ideas, desires, and actions. We may think that we should like to find ourselves always in the same surroundings as our ancestors, so that we might be guided at every touch and turn by the experience of our race, and be saved from all self-communing or interpretation of oracular responses uttered by the facts around us...

Whether the organism or the surroundings began changing first is a matter of such small moment that the two may be left to fight it out between themselves; but, whichever view is taken, the fact will remain that whenever the relations between the organism and its surroundings have been changed, the organism must either succeed in putting the surroundings into harmony with itself, or itself into harmony with the surroundings; or must be made so uncomfortable as to be unable to remember itself as subjected to any such difficulties, and therefore to die through inability to recognise [sic] its own identity further...

So with politics, the smaller the matter the prompter, as a general rule, the settlement; on the other hand, the more sweeping the change that is felt to be necessary, the longer it will be deferred.

The advantages of dealing with the larger questions by more cataclysmic methods are obvious. For, in the first place, all composite things must have a system, or arrangement of parts, so that some parts shall depend upon and be grouped round others, as in the articulation of a skeleton and the arrangement of muscles, nerves, tendons, etc., which are attached to it. To meddle with the skeleton is like taking up the street, or the flooring of one's house; it so upsets our arrangements that we put it off till whatever else is found wanted, or whatever else seems likely to be wanted for a long time hence, can be done at the same time."

The question is whether the era of gradualistic changes addressing the ecological impacts of human economic activity (e.g. air and water pollution laws, automobile emission regulation and engine efficiency regulation and so forth) are no longer adequate and a major reorganization of social paradigms is required.

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