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Battery Shortage Could Harm German OEMs' EV Plans

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Aug. 21, 2018—Analysts have begun to fear that German car companies could struggle to meet demand for electric vehicles because none of them currently produce their own batteries, according to a report by digitaltrends.com.

Most German OEMs rely on third-party suppliers for batteries, mainly from Asia. That fact has left German automakers in a bind with their country’s government. Germany’s auto industry is largely considered incapable of producing its own batteries, because OEMs in that country simply weren’t prepared for the sudden, growing popularity of EVs and hybrids. And that fact has German chancellor Angela Merkel both frustrated and concerned about her nation’s economy.

Merkel doesn’t like the fact that Germany’s most crucial industry is relying on foreign suppliers.

Until three years ago, Daimler had a battery cell production facility in the German state of Saxony. The plan, according to digitialtrends.com, was for Daimler to win contracts from its German competitors and to build the build the business. However, those plans fell through, largely because no German OEMs had what were perceived to be top hybrid or EVs to sell. Thus, that project was halted.

Yet, as EV and hybrid demand continues to grow, analysts say the need for German OEMs to have a battery production facility in their country will continue to increase.

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