The
decision, which was widely expected, gives another boost to the
economically weaker former communist east of the country after
electric vehicle pioneer Tesla <TSLA.O> in November laid out
plans for its first European factory and design center near
Berlin.
The site, located in the town of Schwarzheide, some 120 km (75
miles) south of Berlin, will draw on feedstock from another BASF
factory in Harjavalta, Finland, close to a nickel and cobalt
refinery of raw materials partner Norilsk Nickel. <GMKN.MM>
"With these investments in Finland and Germany, BASF will be the
first CAM (cathode active materials) supplier with local
production capacities in today’s three major markets – Asia, the
U.S. and Europe," the company said in a statement.
The two factories will be able to prove enough cathode materials
for 400,000 fully electric vehicles per year, it added.
BASF, which announced plans for the Harjavalta site in 2018, has
previously put the combined investment for both projects at 400
million euros ($436.48 million).
A spokeswoman on Wednesday would not comment on the size of each
project.
The European Commission on Dec. 9 approved 3.2 billion euros
($3.53 billion) of state aid from seven European Union countries
for research and innovation in battery technology.
Germany's economy minister said at the time that companies that
would benefit from this included BASF, BMW <BMWG.DE>, Opel <PEUP.PA>,
Umicore <UMI.BR> and Varta <VAR1.DE>.
Liberum analysts have estimated that cathode materials in a 50
KWh car battery will cost about $2,500, making it among the most
costly parts of an electric vehicle.
BASF has said it expects the global market for cathode materials
to be worth between 25 billion and 30 billion euros by 2025,
boosted by demand for electric and hybrid vehicles.
BASF is competing with Europe's Umicore and Johnson Matthey <JMAT.L>
as well as with a range of Chinese suppliers including Beijing
Easpring <300073.SZ> and Ningbo Shanshan <600884.SS>.
(Additional reporting by Thomas Seythal and Patricia Weiss;
Editing by Madeline Chambers, Kirsten Donovan)
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