German battery production, trade decline; lobby urges action
Battery production and trade in Germany faced significant challenges in 2024, primarily due to a slowdown in the electric vehicle (EV) market and increasing competition from Asian manufacturers, according to the electronics industry association ZVEI. The group has urged policymakers to take decisive actions to avert further decline in Germany’s competitive standing in battery manufacturing.
### Decline in Market Volumes
ZVEI reported a sharp 16% decrease in market volumes—encompassing production and imports, minus exports—resulting in a total market value of €20.5 billion ($23.8 billion). This downturn is largely attributed to diminishing demand for lithium-ion batteries, which are critical for e-mobility solutions.
### Calls for Political Intervention
Christian Rosenkranz, chairman of ZVEI’s battery section and managing director at Clarios Germany, emphasized the necessity for urgent political measures. He highlighted the need for competitive energy costs, expedited approval processes, reduced bureaucratic obstacles, and consistent funding aimed at research initiatives. These areas have caught the attention of the new coalition government, which is striving to revitalize economic growth through substantial tax cuts and targeted spending packages.
### Recent Trends in Production and Trade
According to ZVEI’s data, battery production values have dipped by 5% to €7.3 billion, while exports decreased by 3% to €7.9 billion. Concurrently, imports saw a striking 15% decline, totaling €21.2 billion. These figures underscore the broader pressures facing Germany’s battery industry as it navigates the dual challenges of reduced demand and competitive pressures.
### Future Outlook: Change on the Horizon
Despite the current difficulties, ZVEI remains optimistic about the long-term prospects of the battery sector. There is a consensus that the overall trend towards electrification in the transportation sector is expected to continue, suggesting potential recovery for lithium-ion battery sales. Gunther Kellermann, managing director of the battery section, stated in a press call, “The megatrends of electrification are intact.” He even hinted at a potential recovery by 2025, forecasting more favorable conditions by 2026.
### Emerging Opportunities: Defense Technology Demand
Moreover, ZVEI executives identified a growing demand for batteries linked to defense technology, driven by recent geopolitical developments. This area represents a burgeoning opportunity for battery manufacturers, signaling a potential shift in demand dynamics.
In summary, while Germany’s battery sector faces significant short-term challenges, including a steep decline in production and trade, there are signs of resilience and potential recovery on the horizon. The ongoing push for electrification and new avenues of demand—particularly in defense—could pave the way for revitalization in the years to come.