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Science policy: cuts: battery research without juice

Science policy: cuts: battery research without juice

View into the drying room of the battery research center Electrochemical Energy Technology MEET at the Westphalian Wilhelms University in Münster

Photo: IMAGO/Ralph Lueger

Energy storage is of central importance for the energy transition and electromobility. Nevertheless, the federal government’s research policy should cut funding for battery research. Experts warn of the negative consequences for Germany’s technological sovereignty.

The future of energy actually belongs to batteries. They are needed in more and more areas for sustainable energy production and use. Be it for long-range electric vehicles in traffic or for long-lasting electricity storage in households and industry. They can also buffer performance fluctuations when producing “green electricity” from solar and wind power. The battery industry is therefore considered a key industry for Germany. The technical diversity requires broad research efforts. This also includes basic research, such as in the field of electrochemistry at universities.

Given this importance, it came as a surprise to experts that the draft for the 2025 federal budget now includes a massive cut in state funding. To date, around 155 million euros in public funds have flowed annually into battery research at universities and institutes. Almost a third of this is financed from the budget of the Federal Ministry of Education and Research (BMBF). Further funds come from the Climate and Transformation Fund, which is managed by the Federal Ministry of Economics.

Minus more than a fifth

Now only 118 million euros are earmarked for battery research in the federal government’s draft budget for next year – a loss of 37 million euros, more than a fifth. Even worse: the money will only be used to support ongoing projects until their end in 2028. New research projects will no longer be funded. A scientific field of the future is declared closed in the middle of the energy transformation. The experts in research and the energy industry are shocked.

“We will no longer be internationally competitive in Germany because it will be an emergency stop,” says Kai-Christian Möller, who coordinates the “Battery Alliance” of the Fraunhofer research institutes. “The working groups will bleed dry,” predicts Möller. “The projects will run out in the next few years, then the barrel will be empty and we will have to start all over again in five years,” was the battery researcher’s dejected expectation. “The whole world is relying on electromobility and we believe we live in our own bubble,” comments Martin Winter, a renowned battery researcher and founding director of the MEET Battery Research Center at the University of Münster, “This cut is really a measure to increase battery research in Germany “finish it,” is his verdict. “The limitation of funds will mean that we will cut jobs everywhere in Germany – including in North Rhine-Westphalia and Münster.”

The business side is also dismayed as it sees a looming loss of technological sovereignty and competitiveness for Germany as a business location. Above all, the automotive industry, which is undergoing intensified restructuring and is urgently dependent on the new generation of high-performance batteries for electromobility. The President of the Association of the Automotive Industry (VDA), Hildegard Müller, sees the funding stop as a “contradiction between the goals set and the actual policy.”

In recent years, things have been going well again in the research field of electrochemistry, which had temporarily bled dry after a generational change in the 1990s because the universities did not fill professorships that became vacant for reasons of saving money. When research policy became aware of the strategic importance of battery technology again, massive funding began. The BMBF invested, among other things, in the Ulm Helmholtz Institute (HIU) and the Center for Solar Energy and Hydrogen (ZSW), where a pilot plant for cathode material was set up. In addition to the federal government, the states are also involved in battery research. The “Schwäbische Zeitung” found that the Ministry of Economic Affairs in Baden-Württemberg funded twelve business-related research projects with more than seven million euros between 2022 and 2024.

Studies identify needs for support

Two current innovation studies that were published last week show the direction in which battery research in Germany should actually be steered with funding incentives: the “Transformation Paths” study by the management consultancy Boston Consulting on behalf of the Federation of German Industries (BDI) and the study from former ECB director Mario Draghi about the future of European competitiveness for the EU Commission.

The BDI study consistently emphasizes that research and innovation for future technologies should be strengthened in Germany. This would also benefit domestic manufacturers, who would thereby have “a better chance of establishing a new technological advantage” and strengthen European sovereignty. With this objective, “Germany should significantly more aggressively support the development of a strong European battery value chain (including ensuring competitive energy prices), the recycling of batteries and research in key future technologies such as solid-state batteries, bidirectional charging and autonomous driving,” says the study “Transformation Paths «.

Pre-products in focus

The raw material base is important. This applies especially to semiconductor materials that are used in many industries, which together account for more than half of German industrial gross value added. Germany currently sources a quarter of this from Taiwan, which is at the center of geopolitical tensions. “The same applies to batteries – a central component in the future vehicle market and therefore the most important preliminary product in Germany’s largest industrial sector – around 40% of which currently have to be imported from China,” states the BDI study. In addition, the market for rare earths and their further processing products, such as permanent magnets for electric motors and generators, is dominated worldwide by China.

According to the BDI, this situation should be responded to with strategic re-industrialization in order to ensure the “resilience of German industrial value creation”. The study advocates “localizing the most critical intermediate products such as semiconductors and batteries with their own production capacity in Germany and Europe.” Investments totaling more than 50 billion euros are planned for the construction of semiconductor manufacturing facilities in Germany alone by 2030. Following the current cancellation of Intel’s investment in a chip factory near Magdeburg, 30 billion euros must be deducted from this figure. In addition, there would be around 28 billion euros for building up production capacities for German cell production and the production of cathode materials.

In addition to the 28 billion euros that will be needed by 2030 to build up capacity for battery cell production “in order to supply almost 100% of domestic e-car production with battery cells, a further nine billion euros would be needed for dismantling and… investments in the refining of critical raw materials.” The study understands this to mean the development of lithium and copper production in Germany as well as processing capacities for critical materials such as nickel sulfate and lithium hydroxyte.

According to the study, almost two thirds of the necessary investments should be borne by the private sector, the rest through tax-financed public investments. Of course, these are sums that do not play a role in the budget discussions now taking place in the Bundestag – where the aim is to close a 37 million euro gap.

EU more ambitious than Germany

At the European level, battery funding may be more popular than in Germany. “There are promising signs of progress in next-generation battery technologies in the EU,” states the Draghi report. While most of the announced capacity is dedicated to producing batteries using lithium-ion chemicals (referred to as “current generation”), companies in the lithium-ion battery market and more specialized new entrants are already working on components and designs, which are expected to encompass the next generation.” These include storage technologies based on sodium-ion and solid-state batteries. Delivery of sample cells for sodium-ion batteries that do not use lithium will soon begin in the EU. Draghi further notes that “the growth in public research and development spending in battery technology has averaged 18 percent per year over the last decade.” This significantly exceeded the growth in total energy research and development spending in the EU member states. What Draghi doesn’t mention: Germany is currently preparing to abandon this European course in battery research.

“You have to start all over again in five years.”

Kai-Christian Möller 
Fraunhofer Battery Alliance

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