Continental eyes investment in solid-state batteries

FRANKFURT (Reuters) - German automotive supplier Continental (CONG.DE) is considering investing in battery production to compete with Asian and U.S. manufacturers, Chief Executive Elmar Degenhart told trade weekly Automobilwoche in an interview published on Saturday.

"We could well imagine getting into the production of innovative batteries," he said. "That also goes for producing battery cells."

Degenhart said, however, that Conti would not invest in the lithium-ion batteries that are currently in use, but rather in the next generation of solid-state batteries, which might go into production in 2024 or 2025.

"We need a technology leap in energy density and costs," he said. "Such solid-state cells can manage without liquid electrolyte and so are far less flammable."

Although European carmakers assemble battery packs for electric cars, the region has no significant player in battery cells - the essential building blocks for the batteries that are now mostly made in Asia.

The market is dominated by Japanese firms Panasonic and NEC , Korea's LG and Samsung and China's BYD and CATL, as well as U.S. manufacturer Tesla (TSLA.O).

Degenhart said he would aim for a consortium to share the cost, which he estimated at 3 billion euros (2.65 billion pounds) for a plant that could supply around 500,000 electric cars a year.

The European Union last month hosted automotive, chemical and engineering executives to discuss developing battery manufacturing in the bloc, and said EU funding could support the creation of such a consortium.

Degenhart said it would make sense to build three plants, one in Europe, one in America and one in Asia to be close to customers in each region.

He added that Germany would be out of the question as a location due to its high electricity prices, pointing out that LG and Samsung were building smaller battery factories in Poland and Hungary, where electricity was 50 percent cheaper.

(Reporting by Georgina Prodhan; Editing by Ros Russell)