MUNICH, Germany — Daimler AG (Stuttgart, Germany) and Evonik Industries AG (Essen, Germany) have established a strategic alliance to develop and market lithium-ion batteries for hybrid-electric and electric vehicles. The companies see a billion-euro market.

Having invested some €80 million (about $106 million) over the past years into the development of lithium-ion batteries, the company believes this core element for electrically driven cars is now mature enough for volume deployment. The energy storage devices will be used by Daimler in near-future vehicles such as the S400 BlueHybrid, the companies said.

Evonik claims to have developed lithium-ion batteries superior in terms of durability and weight. The company says it holds more than 230 patents referring to lithium-ion battery technology. In particular, the company has developed electrodes and separators for the batteries.

The development work has been done in Evonik's subsidiary Li-Tec Battery GmbH & Co KG (Kamenz, Germany). Now Daimler has announced to acquire 49.9 percent of the company; in the mean term, Daimler and Evonik hope to attract a third shareholder with expertise in electrical and electronic systems integration. In addition, the companies plan to launch a joint venture aiming at developing and manufacturing battery systems for automotive applications. Daimler will hold 90 percent of that JV, and Evonik 10 percent.

The lithium-ion batteries developed will be used in passenger cars as well as in trucks and buses, the companies said. While the unit will serve Daimler's needs in the first place, it also will sell batteries to third parties. With more than a million electric vehicles by 2020 in Germany alone, the parent companies expect a market volume of more than €10 billion for batteries within the next decade; the market volume for battery materials is expected to exceed €4 billion. With volumes ramping up, Evonik said it expects the job count in this sector to climb from currently about 100 to more than 1000 persons.

"We have the universal electric drive — suitable for everyday use, safe, and affordable," claimed Evonik CEO Werner Mueller.

However, Evonik is not the only contender at this market place. Automotive tier one Continental already has announced the production start for lithium-ion batteries, and Volkswagen cooperates with Sanyo to bring the energy storage device to the maturity phase. Likewise, Bosch maintains a partnership with Samsung for the same purpose while Johnson Control-Saft has received an order to produce these batteries for the US market.