Europe wants the lead in electric vehicle batteries
The European continent wants to take the lead in the field of electric car batteries after years of ceding this sector to foreign companies.
The European continent is expected to lead the global sales of electric vehicles for the second year in a row, and accordingly, there is a rush to build a battery supply chain from scratch across the continent.
Potential manufacturers in the northern region, Germany, France, the United Kingdom, and Poland are appearing in a transcontinental competition to shake off the dominance of Chinese company CATL and South Korea's LG Energy.
The race continues for the emergence of a regional champion driven by state support of at least 6.1 billion euros (7.3 billion US dollars) and investment plans totaling 10 times that in just one year.
Contestants include startups Northvolt, Britishvolt, and Automotive Cells, along with Tesla and Volkswagen.
The European continent could see its share of global battery production rise to 31 percent by 2030 from just 7 percent last year.
“We are in the process of creating a new industry in Europe, and in the process of creating an entirely new ecosystem, where investments are pouring in,” said (Maros Sefcovic), European Commission vice president overseeing the batteries initiative.
- Zivkovic estimated the planned investment at 60 billion euros (71 billion US dollars), three times what is spent in China.
- These investments span the entire supply chain, from materials and cells to assembly and recycling.
- And electric vehicle sales in Europe doubled last year to about 1.3 million units, topping China for the first time.
- That could reach 1.9 million this year as Volkswagen, Stellantis, and BMW layout plans for new models and higher productivity, and Ford and Volvo are committed to moving to nearly all-electric cars.
These ambitions require a lot of energy, and political leaders in Germany, France, and Brussels reject the domestic car industry's dependence on external suppliers, including battery manufacturers located outside the European region.
It is estimated that there are plans for about 27 battery production sites across the European region that could produce at least 500 gigawatts of cells this decade.
Last month, Volkswagen launched an estimated $ 18 billion plan to build six battery plants in Europe and expand its network of fast-charging stations.
And if all goes as intended, the German carmaker and its partners could outrun its competitors and become the second-largest cell producer in the world behind CATL.
The European Commission has set a goal of getting at least 30 million zero-emission cars on the road by 2030, and the ambition is for European factories to cover more than 90 percent of the battery demand.
Demand for batteries is expected to be so strong that production is barely keeping pace with that by the end of the decade.
Still, it won't be easy for startups to catch up with CATL, LG Energy, and Panasonic, which spent years developing operations in Asia and the United States before moving to Europe.
CATL, the largest producer of rechargeable cells, is investing $ 12 billion to add about 230 gigawatts of capacity worldwide over the next four years.
The Chinese company supplies nearly every major global brand of electric cars, and it is expected to start production in Germany this year.
Then there is Tesla, the world's largest maker of electric cars, which sold nearly half a million cars last year and plans to assemble Model Y batteries and batteries in Germany for the era of its European expansion.
And when it comes to startups, Northvolt - which was founded by former Tesla executives - is years ahead of its competitors, and wants to capture 25 percent of the battery market in Europe by 2030.
Northvolt has concluded a $ 14 billion supply deal with Volkswagen and another with BMW and is preparing to produce the cells by the end of the year at its site in Sweden.
- Britishvolt plans to start building a $ 3.6 billion plant in the Northeast of England later this year and is in talks with electric vehicle makers in the United Kingdom, the European Union, the United States, and Japan.
- Automotive Cells also plans to accelerate expansion by producing batteries at former auto parts manufacturers.