(Bloomberg) — BASF SE is prepared to dig deep, pouring money and expertise into developing materials for electric-vehicle batteries to catch up with rivals like Tesla Inc. supplier Sumitomo Metals & Mining Co.
The world’s No. 1 chemical maker is adding to its expansion plans in Europe, which is emerging as the next high-growth region for batteries, said Ken Lane, BASF’s global head of catalysts. Battery makers in the market currently rely on Asian suppliers like Sumitomo that provide nickel and lithium.
“We are the largest chemical supplier to the automotive industry, and this is the biggest opportunity that we see in that space today,” Lane said in a phone interview. “Asia has been the growth story till now and will continue to grow, but Europe is also going to be growing very fast over the next decade.”
The Ludwigshafen, Germany-based company plans to build a 400 million-euro ($488 million) factory in Europe to make cathodes from a concoction of elements that determine the battery’s strength and lifespan. Work has yet to begin on the plant, but BASF is already looking ahead to additional projects.
The splurge is part of an arms race to scale up output of cathodes to meet demand at a reasonable cost. The U.K.’s Johnson Matthey Plc is investing as much as $270 million, and Belgium’s Umicore SA is spending more than $350 million on its South Korean operation as it seeks to stay ahead of the competition.
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