Industry warns budgets cuts will “destroy” battery research in Germany

A research and development alliance representing Germany’s battery industry has blasted government plans to slash research and development funding for the field, warning that the move would “lead to the end of German battery research.”  The alliance, Competence Network Lithium-Ion Batteries (KLiB), is made up of leading companies and research institutes focused on improving battery technologies. The alliance adds that, without funding, the German energy transition will be dependent on non-European companies, and that the basis for a “technologically sovereign German battery ecosystem” will be “destroyed.”

In an open letter to German chancellor Olaf Scholz, economy minister Robert Habeck, education and research minister Bettina Stark-Watzinger and finance minister Christan Lindner, KLiB chairman Burkhard Straube and board member Martin Winter outlined the dire consequences of defunding the country’s battery research sector, and the decision to remove electromobility from the Climate and Transformation Fund (CTF). The cuts would affect around 75 percent of planned battery and research funding for 2024 and the following years, and have “dramatic consequences for Germany as a high-tech location,” they wrote.

High-performance batteries, the letter reads, are essential for “the competitiveness of electric vehicles, stationary storage systems, buses, trucks, drones, power tools and e-bikes. Without batteries, the transformation of the economy and society towards CO2 neutrality cannot be achieved.” The European battery ecosystem is expected to reach a value of 250 billion euros by 2025. The forced phase-out of research projects would also mean the loss of academic training, which would “massively worsen the shortage of skilled workers” and bring Germany’s technologically sovereign battery ecosystem to a standstill. Small and medium-sized companies would no longer have the basis to establish and develop themselves in the rapidly growing market, while large companies would have to relocate operations to other countries, the letter reads.

The government is struggling with a major budget crisis that is upending many of Germany’s energy transition policies, following a constitutional court ruling that declared plans to repurpose unused pandemic funds for climate and transformation projects unconstitutional. According to business weekly WirtschaftsWoche, the planned cuts for Germany's research ministry will amount to 156 million euros for 2024.