Chinese firms out in force at Frankfurt boosted by battery builders




Chinese firms out in force at Frankfurt boosted by battery builders


By Edward Taylor and Christoph Steitz

FRANKFURT (Reuters) - Chinese suppliers and manufacturers have stepped up their presence at the Frankfurt auto show, capitalizing on a shift toward electric cars forced on German carmakers by regulators seeking to curb pollution.

Though the number of exhibitors has fallen to 800 in 2019 from 994 in 2017, Chinese automakers and suppliers now make up the biggest foreign contingent, with 79 companies, up from 73.

Several European and Japanese carmakers including Fiat (MI:FCHA), Alfa Romeo, Nissan (T:7291), Toyota (T:7203) and Peugeot (PA:PEUP), have skipped the show as the industry seeks cost savings.

Automakers face multi-billion euro investments to develop electric and autonomous cars.

But China's bigger presence is also due to Europe's lack of expertise in lithium ion battery cell production, an area where Asian suppliers dominate.

German firms are striking major deals with Chinese suppliers to help them meet stringent anti-pollution rules, which were introduced in the wake of Volkswagen's (DE:VOWG_p) 2015 emissions cheating scandal.

"All carmakers face the challenge that they will have to fulfill fleet consumption targets," Matthias Zentgraf, regional president for Europe at China's Contemporary Amperex Technology (CATL) (SZ:300750), told Reuters.

Zentgraf said he expected further supply deals to be struck in Europe this year following agreements with BMW (DE:BMWG) and Volkswagen.

Daimler (DE:DAIGn) on Wednesday said it had chosen China-backed Farasis Energy to supply battery cells for its Mercedes-Benz electrification push.

Farasis is building a 600 million euro ($663 million) factory in East Germany, close to where Chinese rival CATL is erecting a 1.8 billion euro battery plant.

SVOLT Energy Technology, which was carved out of China's Great Wall Motor Co (SS:601633), told Reuters it will start building battery cells in Europe at a new 2 billion euro plant in 2023.

German carmakers have been forced to accelerate electrification plans after European Union lawmakers imposed a 37.5% cut in carbon dioxide emissions between 2021 and 2030 in addition to a 40% cut in emissions between 2007 and 2021.

Electric cars made up only 1.5% of global sales last year, or 1.26 million of the 86 million passenger vehicles sold, JATO Dynamics said.

If carmakers fail to meet the 2021 targets they face 33 billion euros in fines, analysts at Evercore ISI have estimated.

They estimate it will cost the auto industry an aggregate 15.3 billion euros to comply, assuming a 60 euro cost per gram to reduce CO2 emissions for premium carmakers and 40 euros per gram of CO2 reduction for volume manufacturers.





Related News

StockBeat: PMIs, Thomas Cook, Oil Cast a Pall Over European Stocks
Today, 10:24
Investing.com -- Summer’s over for European stocks, it seems. The benchmark Stoxx 600 fell to its lowest in five days on Monday after another bleak round of business surveys from the euro zone’s biggest economies suggested no end to the
Thomas Cook collapses: Why and what happens now?
Today, 10:21
By Kate Holton and Guy Faulconbridge LONDON (Reuters) - Thomas Cook (L:TCG), the world's oldest travel firm, collapsed on Monday, stranding hundreds of thousands of holidaymakers around the globe and sparking the largest peacetime repatriation
Factbox: European reaction to Thomas Cook bankruptcy
Today, 10:18
(Reuters) - British travel operator Thomas Cook (L:TCG), which ran hotels, resorts and airlines ferrying 19 million people a year to 16 different countries. It currently has 600,000 people abroad, forcing governments and insurance companies to
German Industrial Recession Drags Economy Deeper Into Slump
Today, 10:15
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here.  Germany’s economy is suffering its worst downturn in almost seven years as a manufacturing slump deepens, raising pressure on the
Thomas Cook's Condor says it has 240,000 customers currently abroad
Today, 10:12
BERLIN (Reuters) - Condor, the German airline subsidiary of collapsed travel company Thomas Cook said on Monday there were 240,000 people booked on its flights awaiting a return home. Separately, the airline said its flights were still operating as



Latest News
StockBeat: PMIs, Thomas Cook, Oil Cast a Pall Over European Stocks
23.09.2019 10:24
Investing.com -- Summer’s over for European stocks, it seems. The benchmark Stoxx 600 fell to its lowest in five days on Monday after another bleak round of business surveys from the euro zone’s biggest economies suggested no end to the current slowdown. Germany's DAX led losses with a 1.5% drop, while the Italian FTSE MIB was down
Read more
Thomas Cook collapses: Why and what happens now?
23.09.2019 10:21
By Kate Holton and Guy Faulconbridge LONDON (Reuters) - Thomas Cook (L:TCG), the world's oldest travel firm, collapsed on Monday, stranding hundreds of thousands of holidaymakers around the globe and sparking the largest peacetime repatriation effort in British history. What happens now and why did it collapse? WHO IS AFFECTED? The firm ran
Read more
Factbox: European reaction to Thomas Cook bankruptcy
23.09.2019 10:18
(Reuters) - British travel operator Thomas Cook (L:TCG), which ran hotels, resorts and airlines ferrying 19 million people a year to 16 different countries. It currently has 600,000 people abroad, forcing governments and insurance companies to coordinate a huge operation to bring them all home. Here is a summary of official responses to the Thomas
Read more
German Industrial Recession Drags Economy Deeper Into Slump
23.09.2019 10:15
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here.  Germany’s economy is suffering its worst downturn in almost seven years as a manufacturing slump deepens, raising pressure on the government to add fiscal stimulus. Factory activity is shrinking at the fastest pace in a decade and
Read more
Thomas Cook's Condor says it has 240,000 customers currently abroad
23.09.2019 10:12
BERLIN (Reuters) - Condor, the German airline subsidiary of collapsed travel company Thomas Cook said on Monday there were 240,000 people booked on its flights awaiting a return home. Separately, the airline said its flights were still operating as usual but that it would not carry Thomas Cook customers booked for Monday or Tuesday.
Read more