BASF sees slowing electric vehicle sector, pauses Tarragona refinery plans

LONDON (ICIS)–BASF is moving to “de-risk” its exposure to the electric vehicles sector in response to slowing market dynamics, CEO Markus Kamieth said on Friday, pausing or deciding against several investments connected to the industry.

Take-up of electric vehicles has slowed in most markets other than China, Kamieth said, prompting the company to shift strategy, with new capacities added only where BASF has obtained long-term offtake agreements.

“We are confident that the trend toward electric vehicles will continue and that battery materials remain a significant growth opportunity for the chemical industry,” Kamieth said, speaking at a press conference at BASF’s Ludgwigshafen, Germany, headquarters.

“However, recent dynamics have changed, and the market penetration of electric vehicles has slowed down significantly outside of China, as shown by a number of announcements by companies in the e-mobility value chain,” he added.

The company decided against proceeding with a mooted nickel-cobalt refining complex in Indonesia last month, on the back of shifting nickel market dynamics that are likely to make long-term supply of battery-grade material easier to source.

“The supply options have evolved and with that BASF’s access to battery grade nickel. This decision will significantly lower future capital requirements,” Kamieth said.

Kamieth, who became CEO of the company in April this year, also moved to pause work on a proposed commercial-scale electric vehicle battery recycling metal refinery at its Tarragona, Spain, complex.

To be based on technology developed and tested at BASF’s Schwarzheide, Germany, refinery and with a potential investment range of €500 million to 700 million, the company announced that the project was under consideration in February.

Uncertainty also continues at BASF’s Harjavalta, Finland, precursor cathode active materials (PCAM) plant, which has been locked in a cycle of granted environmental permits that are then overturned on appeal.

The company recently obtained fresh operation permits for the site, but those could also be overturned, according to Kamieth.

“A few weeks ago, we received the approval to operate the site as requested,” he said. “The proviso is that there can be protests against this approval again.”

The project, which was yet to receive final investment decision, will remain on hold “until cell capacity build-up and the [electric vehicle] adoption rate in Europe regain momentum,” Kamieth said.

The current shift is “a short-term stretching of a growth curve that will inevitably be very large”, he said, due in part to the investment step-changes required in fast-scaling markets that regulatory or investment fears can delay.

“We believe that the trend towards electromobility as the powertrain technology of the future is still valid. We also believe that the growth in battery materials is going to be very substantial, and the biggest growth opportunity for that probably right now exists in the chemical industry,” he added.

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