BERLIN -- Continental is considering investing in battery production to compete with Asian and U.S. manufacturers.
"We could well imagine getting into the production of innovative batteries. That also goes for producing battery cells," CEO Elmar Degenhart told Automobilwoche, a sister publication of Automotive News Europe.
Degenhart said he would aim for a consortium to share the cost. An investment of 3 billion euros ($3.5 billion) would be needed for plant that could supply around 500,000 electric cars a year, he said.
Continental would not invest in the lithium ion batteries that are currently in use, but rather in the next generation of solid-state batteries, which might go into production in 2024 or 2025, Degenhart said. Batteries need a technology leap in energy density and costs, which is expected with the next generation of solid state batteries, he said.
If Continental decides to invest in battery production, it would open three factories, one in Europe, one in North America and another in Asia, so that production would be close to customers.
Germany would be out of the question as a location due to its high electricity prices, Degenhart said. He noted that LG and Samsung were building smaller battery factories in Poland and Hungary, where electricity is 50 percent cheaper.
Although European automakers assemble battery packs for electric cars, the region has no significant player in battery cells, the essential building blocks for the batteries that are now mostly made in Asia.
The market is dominated by Japanese firms Panasonic and NEC, Korea's LG and Samsung and China's BYD and CATL, as well as Tesla in the U.S.
The European Union last month hosted automotive, chemical and engineering executives to discuss developing battery manufacturing in the bloc, and said EU funding could support the creation of such a consortium.
Reuters contributed to this report