“Short Arms Syndrome” Sinks TerraE Consortium Plan
Are you familiar with “short arms syndrome?” That’s the affliction that makes it impossible for some people to reach their wallets when it comes time to pay the check. Some refer to it as having “alligator arms.” In May, 2017, a group of German electric vehicle manufacturers came together to form the TerraE Consortium with a mission to create German built batteries for German built cars using German raw materials and German renewable energy.
The plan was to build one or possibly two battery factories in Germany at unspecified locations with a goal of building up to 34 GWh of batteries annually by 2028. The so-called “green batteries” would offer the German auto industry an alternative to EV batteries from Asian companies like LG Chem, Panasonic, Samsung, and CATL. In fact, the German government has made it plain it considers having a supply of German made batteries a high priority, one it is prepared to back with a considerable amount of cash.
18 months later, the TerraE Consortium is nowhere to be found. In the end, everyone involved talked a good game but when it came time to pony up the money, none of them could find the pen they needed to write a check, according to a report by Electrive.
The German industry faces a conundrum. It is reluctant to sink billions — Tier One supplier Bosch suggests it will cost $20 billion to fully fund a battery factory equivalent to the Tesla Gigafactory — into a project that will end up building obsolete battery cells. Everyone is waiting for solid state batteries to arrive. Who wants to spend $20 billion making batteries that will be yesterday’s news?
As CleanTechnica reported earlier this year, the answer is lots of people. Here is a list of the lithium ion battery manufacturing plants that are actually going ahead across Europe.
¤ Samsung SDI — Göd, Hungary. Late 2018. Cost: $358 million Output: 2.5 GW per year.
¤ SK Innovation — Komárom, Hungary. 2020. No further details.
¤ Daimler — two locations, one in Kamenz and one in Untertürkheim. Scheduled for late 2018. No further details.
¤ LG Chem — Wroclaw, Poland. Schedule for late 2019. No further details.
¤ Northvolt — Skellefteå, Sweden. Funding completed. Production scheduled for 2020.
¤ CATL — Chinese company has announced plans for a European factory but provided no details.
In addition, both Panasonic and Tesla have suggested they have plans for battery production in Europe but have not provided further details.
So while the Germans dithering, others are busy doing. The poster boy for the EV revolution is Elon Musk. He made the decision a decade ago to push forward with building electric cars. He made the decision to build a battery factory to supply those electric cars. He made the decision to construct a system of charging stations for those electric cars.
Elon Musk thrives on risk. Established businesses are severely risk averse. There will be a day of reckoning. Either Tesla will go down in flames or the vaunted German auto industry will simply fade away, a victim of its own trepidation about an uncertain future. Oh, why do things have to change just when everything was going so well?
In an odd twist to this story, German industrial leaders are belaboring their government for not doing enough to address the reality of climate change, especially in light of the explosive IPCC 6 climate assessment report that came out last week. In our report on that story, we mentioned the fight over the Hambach Forest that has sparked an active protest movement. RWE, a German energy company, wants to destroy the forest so it can access the lignite beneath it.
As part of the Electrive story on TerraE, it mentions that Peter Altmaier, Germany’s economics minister, has promised RWE a boatload of cash if it will give up coal mining and build a battery factory instead. Strange times when government has to bribe businesses to do the right thing. Or maybe not so strange. Perhaps that is just what governments normally do and we just don’t realize it.
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