German battery maker Varta has sealed a research agreement to lay the groundwork for mass production of lithium ion battery cells for electric cars as it seeks to take on Asian leaders in the sector. Varta, which currently specializes in batteries for hearing aids and large storage systems for solar energy, has agreed a cooperation deal with Germany's Fraunhofer Institute, a scientific research body, the two parties said on Monday. The German government has earmarked 1 billion euros ($1.1 billion) to support domestic companies looking to produce battery cells for EVs as a way to reduce German automakers' dependence on Asian suppliers and protect jobs at risk from the shift away from combustion engines. With the research project, Varta wants to gain technical advantages in battery cell production over Asian manufacturers and is in intensive discussions with relevant market players to broaden its product line, Varta CEO Herbert Schein told reporters in Stuttgart.
China's powerful state planner said on Thursday it had not considered reducing the tax on vehicle purchases, seemingly pouring cold water on industry hopes that Beijing might cut the tax by half to shore up the flagging auto market. Meng Wei, spokeswoman for the National Development and Reform Commission, said the world's largest auto market was under pressure but that the slowdown could actually help weed out weaker players. "Objectively, this (slowdown) could help stimulate the workings of the market, strengthen the industry's core competitiveness and eradicate outmoded capacity," Wei told a press conference in Beijing. "Currently our commission has not considered or proposed the idea of 'cutting the purchase tax to 5 percent'," she added. The purchase tax rate is currently 10 percent. China's car market is on the brink of an annual contraction not seen since at least 1990 after sales fell 11.7 percent in October, the fourth straight month of declines.