Evonik CEO Engel bullish on electric vehicles

24 September 2009 20:25  [Source: ICIS news]

TORONTO (ICIS news)--The emerging market for electric vehicles batteries is a promising growth area for Germany-based specialty chemicals major Evonik,  company chief executive Klaus Engel said on Thursday.

The market for electric vehicle batteries could be worth €50bn ($74bn) in Germany alone by 2020, Engel said in an interview with German business journal manager-magazin.

“Electric vehicle mobility will be coming,” he said.

Moves in the US and China showed that electric mobility was not a question of ‘if’, but a question of ‘how’, Engel told the journal. A spokesman for Essen-based Evonik confirmed Engel's remarks to ICIS news.

Engel defended electric cars against critics in Germany and called on the government to support the sector to create new employment and strengthen the country as a location for innovative manufacturing.

He acknowledged government plans to provide incentives of up to €5,000 for a first purchase of a new electric vehicle in 2012-2014.

But he also said that German tax incentives for research and development (R&D) were still relatively low, compared with other countries where firms could deduct 10% of R&D expenses from their tax.

Echoing recent calls by Germany's chemical producers group VCI, Engel said he expected the country's new government - to be formed after federal elections on Sunday (27 September) - to implement a similar 10% tax credit for R&D.

Tax breaks and incentives should be flexible and reliable, and they should not be time-limited or burdened by red tape, he added.

Evonik, for its part, was in a strong position to benefit from the electric vehicles market, in particular in lithium batteries where it had invested up to now €100m, with further big investments expected to come.

Importantly, Evonik was cooperating with car major Daimler on lithium batteries.

A joint venture plant in Kamenz in Germany's Saxony state was aiming to produce several millions of lithium battery cells from 2011, he said.

Longer-term, power for electric vehicles needed to come from solar or other renewable energy sources, Engel added and pointed to his firm’s activities in the solar sector.

Engel also defended electric vehicles against recent criticism in Germany, dismissing a debate there about the viability of electric vehicles as “typically teutonic.”

Until very recently, Germany’s car makers had been sharply criticised for allegedly having missed out on innovation, he said.

But now, just the chemicals and car industry were coming together to move things forward, critics in Germany were triggering a “passionate fundamental debate,” with some trying to portray electric vehicles as a “crackpot idea,” Engel said.

In a related development, Germany's industrial gases major Linde earlier this month teamed up with Shell, Total, Daimler and other firms to cooperate on plans to set up a nationwide hydrogen fuelling infrastructure in Germany.

($1 = €0.68)

For more on Evonik visit ICIS company intelligence
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By: Stefan Baumgarten
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