By David Meyer
November 13, 2018

The German car industry is crucial to the country’s economy, but it has a problem: the industry is going electric and, right now, the big battery manufacturers are all out in Asia.

That, however, is set to change. The German government has been aware of the issue for a while and in September said that it would provide political support for local battery production. Now it’s ready to go one step further.

On Tuesday, economy minister Peter Altmaier announced that the German government has set aside around €1 billion ($1.12 billion) to support home production of battery cells. According to Reuters, Altmaier said the aim was for Europe to be producing 30% of battery cells by 2030, and he was therefore talking to counterparts in France, Poland and Austria.

The production will likely be handled by a German consortium, with a level of coordination from the government. This is unusual for the German government, which tends to leave the industry to its own devices. But there are huge fears about relying too much on Asian products, and allowing the technology gap to widen past the point of return.

Reuters also reported Monday that Volkswagen, which currently gets its batteries from South Korea’s LG and China’s Contemporary Amperex Technology, is open to joining the planned consortium. Other possible participants include BASF and Ford’s German subsidiary.

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