MUNICH (Reuters) – Plans by a Chinese company to build a battery cell factory in Germany should serve as a wakeup call for the national car industry, whose lack of its own production capacity risks leaving it exposed in a dawning era of electric mobility.

FILE PHOTO: A worker assembles a StreetScooter electric delivery van on the production line during an opening tour in Dueren near Cologne, Germany, May 30, 2018. REUTERS/Wolfgang Rattay/File Photo –

Chinese Prime Minister Li Keqiang is expected to take part in a signing ceremony at a summit in Berlin on Monday for Contemporary Amperex Technology Ltd (CATL) to build the plant in the eastern state of Thuringia.

BMW has awarded a contract worth just over 1 billion euros ($1.2 billion) for CATL to make cells for electric cars, while Volkswagen (VOWG_p.DE) has picked CATL and South Korea’s Samsung and LG Chem to deliver $25 billion worth of batteries.

Tesla founder Elon Musk has also talked about locating a battery ‘Gigafactory’ near the Franco-German border, in the vicinity of its Grohman Engineering division that has built a production line for Tesla’s Nevada plant.

“If we want to have a German battery cell industry, then this is a warning shot,” said auto industry expert Joern Neuhausen of PwC consulting arm Strategy&.

German car makers have championed a switch to greener forms of motoring following the Dieselgate scandal of 2015 that exposed the dark side of their long and lucrative reliance on the internal combustion engine.

Volkswagen called last year for the German and European industry, which employs 12.6 million workers, to team up on…