The German government said on June 29 it will provide €300 million in funding to battery-maker Varta AG as part of a European push to increase production of lithium-ion cells to meet future demand as road transport gradually shifts to electrified powertrains.

Varta has been in talks with the German government over the possibility of a funding boost for cell production since 2018 when Economy and Energy Minister Peter Altmaier announced €1 billion in public funding to be disbursed to companies and European-based consortiums through 2021 to encourage domestic production and reduce heavy reliance on Asian cell imports.

The funding, 30% of which will be contributed by the state of Bavaria, is exempted from state aid restrictions under European law due to qualifying as a project under Important Projects of Common European Interest, or IPCEI.

"We are igniting the next stage in battery cell production in Germany. The first battery components are already being produced in Germany. Now we are taking the next step towards mass production of battery cells for automotive and industrial applications. This is how we are bringing about the energy and transit transition ahead," Altmaier said in a statement.