By Harriet Torry
Chemicals giant BASF SE (>> BASF SE) Friday underscored its plans for developing next-generation batteries for cars and trucks, after making three acquisitions in the technology this year alone with a total value of more than $100 million.
The German company, which released 2011 earnings on Friday, has long been keen to reduce its dependence on cyclical businesses like plastics and chemicals, and has recently set it sights on developing batteries that can be used for electro-mobility for cars and trucks.
Noting the German government's goal of getting a million electric cars on roads by 2020 from the current level of a few thousand, BASF's Chief Executive Kurt Bock Friday said batteries will be a future field of activity "which we're really setting on." This year, BASF will set up a production plant for battery materials in Elyria, Ohio in the U.S.
In May, the German government doubled subsidies to help the auto industry develop electric cars to EUR2 billion. Late last year BASF said it will invest a three-digit million euro sum on developing and producing battery materials over the next five years.
BASF won't build the batteries itself, Bock said, but will provide materials for them.
Bock's comments come just days after Merck KGaA (>> Merck KGaA) sold BASF its electrolytes business for high-performance batteries for a price in the low double-digit million euro range.
The company is betting that batteries based on innovative technology will take off, Bock said Friday, noting that the increasing world population and congestion are two factors that favor electric mobility.
Stricter laws governing greenhouse gas emissions, depleting fossil fuels and the rising price of crude oil are pushing car makers across the world to roll out new zero-emission cars that can run entirely on electricity.
But the chemicals sector and car industry face challenges greater than the noble goal of lowering CO2 emissions, like creating batteries capable of storing enough energy to power a vehicle for long periods.
Vehicles themselves also need to be as lightweight and energy efficient as possible to increase their range.
Innovations BASF is developing include solar panels built-in to vehicles' roofs, extra-strong polymer plastic wheels that weigh less than conventional wheels and use less energy to move, and insulating foams that reduce energy for heating interiors. But such technology needs to be affordable for it to have a market.
To bridge the gaps, partnerships have been formed between the various players. For example, Daimler has a battery-cell joint venture, Li-tek, with a German chemicals and energy company called Evonik Industries AG. Robert Bosch GmbH has one with South Korea's Samsung SDI Co Ltd. (006400.SE) called SB LiMotive. Sanyo Electric Co. and Volkswagen AG (VOW.XE) also co-operate on batteries.
BASF is also getting in on the act. BASF and Daimler AG's (>> Daimler AG) Smart brand last year presented a joint concept vehicle Smart Forvision, a prototype of an improved version of the Smart Fortwo. It demonstrates some of the technologies electric cars will have in the future, like solar cells in the roof and foam insulation.
Although the Smart Forvision won't go into production in its current form, BASF has said a key objective is to evaluate the individual components to test their suitability for cars.
BASF also said in August said it would co-operate with Robert Bosch GmbH on lithium-ion cell research. The line will produce the first trial samples from 2012, and targets annual production volume of more than 200,000 cells by 2015. Since 2006, BASF has worked with Koninklijke Philips Electronics NV (PHG) on developing organic light emitting diode technology for car roofs.
- By Harriet Torry, Dow Jones Newswires: +49 69 29725 511: [email protected]