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Daimler plans €20bn spend on electric car batteries

German luxury car maker expanding its competence in battery cell research and working on next generation batteries to cut its dependence on costly rare earth minerals

A concept Smart EQ electric car at Daimler in Stuttgart, Germany. The firm aims to spend big on batteries. EPA
A concept Smart EQ electric car at Daimler in Stuttgart, Germany. The firm aims to spend big on batteries. EPA

Daimler will buy battery cells worth more than €20 billion (Dh83.61bn) by 2030 as it readies mass production of hybrid and electric vehicles, the maker of Mercedes-Benz cars said on Tuesday.

The company is one of a number of German car makers hugely expanding in electric vehicles as European regulators clamp down on toxic diesel emissions.

"With extensive orders for battery cells until the year 2030, we set another important milestone for the electrification of our future electric vehicles," said Wilko Stark, who oversees procurement and supplier quality on the board of Mercedes-Benz Cars.

Daimler declined to say which suppliers would be awarded the contracts. The company already has battery cell supply deals with Korea's SK Innovation, LG Chem and China's Contemporary Amperex Technology, as it plans to launch 130 electric and hybrid vehicles by 2022 in addition to making electric vans, buses and trucks.

Stuttgart-based Daimler needs battery cells as it builds a global network of battery assembly plants in Kamenz, Untertuerkheim and Sindelfingen in Germany, as well as in Beijing, Bangkok and Tuscaloosa, US, according to Reuters.

Daimler said it was expanding its competence in battery cell research and working on next generation batteries to cut its dependence on costly rare earth minerals including cobalt, which is mainly sourced from war-torn Democratic Republic of Congo.

The Mercedes-Benz EQ electric car, set for a 2019 launch, will use battery cells containing 60 per cent nickel, 20 per cent manganese and 20 per cent cobalt, the company said.

Future Mercedes-Benz electric cars will contain batteries using 80 per cent nickel and only 10 per cent manganese and 10 per cent cobalt, it added.

"Our engineers are also working on a ratio with 90 per cent nickel, 5 per cent manganese 5 per cent cobalt in order to reduce the amount of rare earth metals even further," Daimler said, adding it was also working on solid state batteries - which don't require any cobalt - for future products.

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The car industry currently has a range of different battery recipes competing for use in battery cathodes. One is NCA, or lithium nickel cobalt aluminium oxide, produced by Panasonic and used by Tesla.

Chinese manufacturers use a composition called LFP which has a lower energy density but does without cobalt, while Japanese car makers use LMO, or lithium manganese oxide, which is used by Nissan and LG Chem.

Daimler's announcement comes after German luxury car rival BMW in September said it plans more deals with mining companies to secure electric vehicle battery materials, and is open to forming alliances to share the costs of developing autonomous-vehicle systems.

BMW management board member Klaus Froehlich said car makers and large suppliers are beginning to discuss how to agree on one standard for autonomous-vehicle systems. Mr Froehlich has said in the past manufacturers and suppliers should agree on a single standard.

"Everybody has an interest or should have an interest" in common autonomous-vehicle standards, Mr Froehlich said during an event to show off a futuristic, electric and autonomous 4x4.

On batteries, Mr Froehlich said, BMW is pursuing a strategy aimed at securing lower-cost batteries than rivals, in part by controlling the supply of raw materials for its battery-making partners.

"We will have agreements with mining companies," Mr Froehlich said. "We have one agreement. There will be more." A key issue, he said, is securing cobalt from mines that do not exploit workers or employ children.

Updated: December 11, 2018 02:43 PM

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