Nearly 130 years ago, German inventor Andreas Flocken was working on a prototype that attracted some attention in Coburg, a small town in Bavaria. On September 28th of 1888, the local newspaper wrote about a “steam chaise” in Flocken’s workshop that “should arouse great interest” after its completion.

Obviously, the author didn’t really understand what kind of “chaise” he had seen in Flocken’s garage, and that it had nothing to do with steam. But how could he? After all, the inventor was about to build a vehicle that is often said to be the world’s first real electric car. Designed like a carriage, made mostly of wood, and weighing 900 pounds, the Flocken Elektrowagen managed a maximum speed of nine miles per hour.

Later in 1888, Andreas Flocken set out for the first test drive with his newly invented EV — and it was a success. Well, almost. After a two and a half hour ride, just when he was about to reach the village of Redwitz, 16 miles east of Coburg, the Elektrowagen stopped. Its battery, although sustainably charged with water power, was dead.

One hundred thirty years later, German carmakers are still having trouble with their batteries.

Later this year, Audi will sell an electric vehicle that can keep up with Tesla’s performance and range. Mercedes, Volkswagen, and BMW will follow soon, as they are set to regain technological leadership, especially when it comes to luxury cars. But even if they do, they will be depending on suppliers from China, Korea, or Japan to deliver one crucial part of their EVs: the battery cells. As it turns out, Germany’s automotive industry is not able to build those highly needed components. At least, not anymore.

For battery experts like Martin Winter, a professor of materials science, energy, and electrochemistry at the University of Münster, that’s worrisome. “Cells can be a major technology differentiator and cells are the by far most costly part of the battery pack,” he toldThe Verge. In his view, a large scale production of battery cells by European or German companies will be crucial for the continent “for keeping its chances in taking part in an enormous and rapidly growing market.”

Until 2015, Daimler operated a battery cell factory in Kamenz, Saxony. The original plan was to win other German car manufacturers as partners. Together, they could have produced in quantities large enough to make the business profitable. But it didn’t work out. Partly because, at that time, German brands didn’t have attractive electric cars in their portfolio. Why would they have needed battery cells?

Production quantities stayed low, costs remained high — and in late 2014, Daimler announced it would close the factory. “We have come to the conclusion that a car manufacturer does not have to produce the cells itself,” Daimler executive Harald Kröger at the time toldDer Spiegel. After that, not much happened for a couple of years, except for Angela Merkel becoming nervous.

The German chancellor and her government fear the idea of the country’s most important industry being permanently dependent on foreign suppliers. Especially since suppliers aren’t even companies from Europe — that would reliably supply German car manufacturers with the latest technology — but from Asia. German companies have already experienced disadvantages resulting from China’s political calculations, when it comes to the awarding of public contracts, for instance.

So Merkel’s new government, formed in March 2018, put the topic high on the agenda by including it into its coalition agreement. “Can it go well if we, as a continent that produces cars, buy battery cells from Asia and the digital infrastructure of a car from somewhere in Asia or America?” Merkel asked this June. She urged German automotive companies to start a race to catch up. But so far, they haven’t.

This spring, Bosch, Germany’s biggest and most important supplier of car components, completely scrapped its ambitious plans to build a cell factory. The second-largest supplier, Continental, doesn’t completely rule out entering the production of battery cells, but hasn’t made any announcements about it, either. Nor have the car manufacturers themselves.

Some months ago, Daimler CEO Dieter Zetsche took the position that with today’s technology, it doesn’t make sense for a German manufacturer to build battery cells. “We know what we’re talking about,” Zetsche said, referring to the unsuccessful project in Saxony.

Zetsche might be right — for now. But Stefan Bratzel, director of The Center of Automotive Management, urges the German car manufacturers and suppliers to team up with European partners — and perhaps also with politicians — to prepare for the next generation of battery cells. Imagine an “Airbus for battery cells,” Bratzel said. The billion-dollar aircraft manufacturer was the result of a Franco-German cooperation.

The right time to get involved would be now, Bratzel toldThe Verge. “You can’t wait three or four years to get started, for it will take several years to make up for the shortfall.”

Even though Germany hasn’t got the expertise in building lithium-ion cells like the Asian companies that have been providing batteries for consumer electronics for a long time, Münster University’s Winter also asks for a coordinated effort of industry, academia, and politicians. “It may be costly and painful, but we need this measure as soon as possible,” he said. Otherwise, both experts warn, German and European companies would risk not being the first to benefit from innovations that could define the future of cars.

It’s possible that Asian suppliers could favor their domestic customers, and provide them with new technology first, Bratzel said. Still, considering the battery trauma of Daimler and the billions that Volkswagen had to pay for the diesel disaster, Bratzel thinks there’s only a 50-50 shot that Germany’s established automotive industry will begin investing.

The remaining glimmer of hope for Angela Merkel is a consortium formed by 19 companies and research organizations under a Frankfurt-based holding named TerraE. Its goal is to start production of lithium-ion battery cells by the end of 2019. But it will take until 2028 to deliver the full targeted production capacity of 34 gigawatt hours.

Meanwhile, Asian manufacturers are cementing their manufacturing power — not only at home, but also in Europe. Battery cells are heavy and transportation from Korea or China is expensive, so Asian manufacturers have been building plants in Europe to cut transportation costs. Samsung is already producing cells in Hungary, LG Chem is building a factory in Poland — and then there’s CATL.

Five weeks ago, the Chinese company announced the construction of a battery cell factory in Erfurt, the capital of Thuringia, a state in eastern Germany. CATL wants to create 600 jobs and invest $270 million until 2022. The most important customer, that will even contribute to the investment, is already known: for its upcoming EV, iNext, BMW will purchase battery cells worth $1.7 billion from Erfurt.

According to BMW executive Markus Duesmann, CATL’s decision to invest in Erfurt was due to “a combination of political goodwill, subsidies and the attractiveness of Thuringia as a business location.” Duesmann invited Daimler to also order battery cells in Erfurt, as higher production numbers would lead to a lower price for each unit. That’s especially important for a factory located in Germany, as not only wages are higher than in neighboring Eastern European countries, but also energy costs.

For the next few years, German car manufacturers have dozens of electric vehicles in their pipelines, so there’s definitely room for more than one battery cell factory. That means TerraE or other German projects might get a real chance.

But it’s not just Asian competition Germany has to watch out for; Elon Musk has expressed interest in setting up a German Gigafactory. The announcement sounded serious enough for German states to get in touch with Tesla and apply as a factory site, including Bavaria. The state government would love to see Elon Musk building a Gigafactory in the very region where a man named Andreas Flocken built his Elektrowagen in 1888.

Just like Musk, Flocken was a multi-talented entrepreneur. In his mid-30s he opened his first factory, producing agricultural equipment like shredding machines. He then invested in a local water mill that generated renewable energy and wanted to supply local businesses with clean power. After that, he started his EV-business, and kept going for almost two decades. His vision feels startlingly modern, which is perhaps why gas-powered cars took over — the time wasn’t yet right for battery-powered vehicles in Flocken’s day. Maybe with stronger batteries, he could have made it.

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