BASF puts battery recycling project in Spain on hold

Demand for electric cars has declined in recent months. This also has consequences for the plans of chemical company BASF. The company is starting a large-scale battery recycling project. Market conditions are currently too uncertain.

Despite declining demand for electric cars, BASF’s large-scale metal refinery project for battery recycling at its Spanish site in Tarragona will be halted for the time being. “We are ready to start as soon as the build-up of cell capacity and the spread of electric cars in Europe gets going again,” CEO Markus Kamieth said in a conference call.

“We are optimistic that the trend toward electric vehicles will continue and that battery materials will continue to be a significant growth opportunity for the chemical industry,” Kamieth said. “At the same time, we are taking steps to reduce risk in the current uncertain market environment.”

The future of BASF’s battery precursor production facility in Harjavalta, Finland, is uncertain. Although the operating license has been granted, a decision on the start of production will not be made until the objection period has expired, Kamieth said in response to a question.

The plant in Schwarzheide in Lausitz, where BASF wants to produce cathode materials for electric vehicle batteries, which form the heart of the batteries, is currently in operation. The qualification processes for the materials for customers are very time-consuming. The subsequent production volumes are secured through contracts. The CEO did not want to comment on the future use of the two production lines.

In the hope of a booming demand for electric cars, car manufacturers have announced massive investments in battery factories. However, after the sudden withdrawal of the state subsidy, demand for electric cars in Germany has fallen. In addition, smaller, affordable electric models are scarce. According to experts, price-conscious customers who are willing to contribute to climate protection have been saturated in recent years.

Despite the current decline in demand for electric cars, BASF remains optimistic about the future of battery materials in the chemical industry. To mitigate risks in the uncertain market, the company is taking measures to postpone its large-scale battery recycling project in Spain, in particular the metal refinery project in Tarragona.

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