By on July 8, 2019

Wary that China might have the battery market totally cornered by the time electric vehicles become mainstream, the European Union is trying to jumpstart the industry at home. This year, the EU has started working with manufacturers and financial institutions to develop a reliable supply chain of the lithium-ion packs that have been difficult to come by.

European Commission Vice President Maros Sefcovic is targeting 100 billion euros ($113 billion) for the program, which Bloomberg said would help the EU “act like China.” 

While emulating China has its pitfalls, especially if you branch out of the automotive realm, procuring a reliable source of battery cells has proven challenging for the car industry. Currently, China has the lion’s share of global battery manufacturing capabilities. The United States comes in a distant second while Europe is in fourth, just behind South Korea, with 4 percent of the market. The EU hopes to match the United States by 2025 — the year most analysts claim EV sales will truly ramp up.

However, Europe is thinking like China in more ways than one. In addition to wanting to become a major automotive battery supplier, it has also set aggressive emission targets and is promoting EVs like mad. Some municipalities have even gone so far as to designate areas that will be forbidden to internal-combustion vehicles in the future. But there are reasons for the battery push that go beyond helping Mother Earth breathe a little easier.

With 13.8 million jobs representing 6.1 percent of employment linked to traditional auto manufacturing in the EU, Europe can’t afford to fall too far behind. Toss in fears that Europe’s auto market is wheezing and examples of major manufacturers pulling out of the continent and you have yourself the start of what many are identifying as a regional crisis. Earlier this year, French President Emmanuel Macron said he wasn’t happy with a situation “where 100 [percent] of the batteries of my electric vehicles are produced in Asia.”

As a result, France and Germany (where the majority of Europe’s cars are built) are trying to accelerate the industry by any means possible. Sefcovic said the European Commission should be able to embrace the state-aid proposal as a special project by the end of October and the two nations are hoping to garner additional support from Spain, Sweden and Poland.

From Bloomberg:

The goal is to build enterprises in Europe that could supply the region’s automakers without requiring imports from the major battery manufacturing centers in Asia. Currently, Contemporary Amperex Technology Co., or CATL, and BYD Co. dominate production in China. Elon Musk’s Tesla Inc. is also building battery gigafactories in the U.S.

So far, Europe has no established battery supply chain, though it has drawn investment in local factories from Korean firms including LG Chem Ltd. and Samsung SDI Co. as well as CATL.

The new ambition of the commission is to stimulate companies big enough to supply the likes of BMW AG and Volkswagen AG, which plan a massive increase in electric car production. Across the industry, the outlook is for a rising portion of cars to run on batteries in the coming years.

The cash will be spread about liberally between manufacturers and parts suppliers, with no single entity getting more than what the EU deems to be its fair share. Economy and Energy Minister Peter Altmaier believes the move could secure the 800,000 jobs in Germany alone. “There’s going to be huge demand in Europe for battery cells,” Altmaier said on ARD Television last month. “We must have the ambition to build the best battery cells in the world in Europe and Germany.”

Speculation on jobs and manufacturing capacity aside, Europe really does need to do something about it’s battery production — especially since it’s so fixated on shifting toward electric cars. Roughly a third of an EVs value can be attributed to its battery pack and with most of that money going to Asia, it’s no surprise the region is worried.

 

[Image: Guteksk7/Shutterstock]

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43 Comments on “Europe Wants to Compete With China’s Battery Production, Eventually...”


  • avatar
    SCE to AUX

    I didn’t know Europe was a country with the ability to levy a $113 billion tax on its citizens. That should go well.

    Kind of makes the US EV income tax break look puny by comparison.

    • 0 avatar
      EGSE

      I didn’t know the EU could levy any tax on citizens of the constituent countries….

      From the European Union website:

      “The EU does not have a direct role in collecting taxes or setting tax rates. The amount of tax each citizen pays is decided by their national government, along with how the collected taxes are spent.”

      https://europa.eu/european-union/topics/taxation_en

      • 0 avatar
        Lorenzo

        The unelected EU leaders control the central bank and the Euro. They’ll get the money one way or another. An indirect tax is still a tax.

        A bigger question is where the electricity is going to come from. The greens have shut down coal and are anti-nuclear, and the continent has little oil and gets most of its natural gas from Russia.

        • 0 avatar
          HotPotato

          Not all enviros are anti-nuclear, and not all coal has been shut down. But with renewables getting ever cheaper, the days for both are numbered. Hopefully the EU has been more proactive than the US in building a smart grid to get the energy from where the sun is shining or the wind is blowing, to where it is not. It’s hardly an insurmountable challenge, but it does need to be done.

    • 0 avatar
      highdesertcat

      “Kind of makes the US EV income tax break look puny by comparison.”

      That it is there at all offends many a US taxpayer, especially those who pay taxes that do not amount to the $7500 EV subsidy of the previous administration.

      There is a HUGE segment of US citizens who pay taxes but do not get anything automotive they buy subsidized. And how about the millions of minimum-wage workers struggling to make ends meet, and yet not qualifying for food stamps, free phones, etc?

      People with money buy EVs as toys. People without money who want/need EVs can’t afford them.

      Not a happy balance there.

      • 0 avatar
        HotPotato

        We disagree about EVs but we agree completely on the knife-edge between “poor enough to qualify for help” and “making hardly any more than that, but enough not to qualify.” It’s one of the most vexing policy problems for people trying to move folks from welfare to work, or help people stay in work and avoid welfare. With the current administration hostile to social programs in general, expanding eligibility up the income scale for stuff like subsidized child care or food aid is not going to happen at the federal level. But states can take action by adding a state earned income tax credit, similar to the federal one. That directly puts money in the worker’s pocket at tax time—not as helpful as a higher wage year round, but better than nothing.

  • avatar
    Hummer

    2019: “There’s going to be huge demand in Europe for battery cells,”

    1939: “There’s going to be a huge demand in Europe for concentration camps”

    If you say so… I guess you can call forcing people to adopt ideas and “wants” at threat of ridicule and fines to be demand.

  • avatar
    Asdf

    There’s no point in making a single BEV battery ANYWHERE in the world until the batteries may be fully charged in a reasonable maximum of five minutes. A BEV would be DEFECTIVE if it couldn’t meet such a basic requirement.

    • 0 avatar
      FreedMike

      So…unless a technological product can be brought out in its’ ten-years-from-now technical configuration, it’s defective.

      Sounds like you didn’t buy any PC, ever.

      Got it.

      • 0 avatar
        Asdf

        It is already possible to refuel an ICE-powered car in five minutes, so we’re not talking “ten-years-from-now technical configuration” at all. A battery-powered car that can’t even do something as basic and trivial as what an ICE-powered car has been able to do for DECADES is DEFECTIVE.

        • 0 avatar
          probert

          Gee – I guess the 100,000 cars Tesla sold this quarter should be recalled. LOL

          • 0 avatar
            Asdf

            Yes, OF COURSE those Tesla cars should be recalled, and have their defects fixed. Every single one of them. There’s no “LOL” about that. Moreover, every single taxpayer dollar spent paying for those defective vehicles should be refunded, and those who bought Teslas should have to cover the expense themselves.

        • 0 avatar
          FreedMike

          Sure, it’s possible…at a price very few can pay.

          Just as we had super-high-end computers back in the day that ran like today’s machines…at a price very few could pay.

          Eventually the advanced, high-priced tech filters down. Before too long, EVs that recharge in five minutes will also be widely available. And then the super-high-priced items will charge in two minutes. This is how tech advancement works.

          Will you then complain that anything that doesn’t charge in two minutes is defective?

          But we both know this isn’t about you objecting to long charge times – it’s a silly anti-EV argument couched in fake “rationality.” And once technology makes your current argument irrelevant, you’ll move on to the next silly argument.

          • 0 avatar
            Roader

            “Before too long, EVs that recharge in five minutes will also be widely available.”

            https://www.youtube.com/watch?v=VUPCl1WUF-E

            “So there’s not doubt about it, next year every car in America will have holes in its side.”

          • 0 avatar
            Asdf

            @FreedMike: Please be so kind as to shove your straw man argument firmly up where the sun don’t shine.

    • 0 avatar
      civicjohn

      @Asdf, You must keep that 5-minute deal on your clipboard, because you trot it out every time an EV is mentioned. I can’t even fill up my car in 5 minutes, I think there’s some common ground somewhere.

      Having said that, it is truly amazing that the EU can find that kind of change in the sofa. I suppose lots of jobs on the line in some countries and that is probably a part of the pandering. I’ll be interested to hear how they deploy the funds, my company got a matching grant from the US Library of Congress and we probably spent 5X the money we got.

      • 0 avatar
        probert

        LOL – well Europe in general has an educated populace and the ability to make decisions in their own best interests. Judging the world based on US disfunction is a mistake.

    • 0 avatar
      Maymar

      What are you wasting your time posting here with? If you want real change, get the NHTSA involved. Call and e-mail them every day to notify them that they need to take action on your sane, legitimate complaint. Let us know how it goes.

      • 0 avatar
        Asdf

        There are LOTS of REALLY STUPID people here posting irrelevant bromides like “you charge your EV while you sleep”. THEY are the ones who should stop wasting their time.

        • 0 avatar
          Maymar

          I take it the NHTSA was too dense to appreciate your dazzling insight?

        • 0 avatar
          probert

          Your dislike of EVs is irrelevant. Hundreds of thousands are sold every year, the head of BMW was just fired for being slow on the uptake, renewable enrgy is one of the largest, and largest growing energy sectors (outstripped coal in total output in the US this quarter). It really doesn’t matter what you “think”, it is happening.

          • 0 avatar
            ajla

            “Hundreds of thousands are sold every year”

            Not to take a fully Americentric view, but *millions* of Buicks have been sold in China since 2015 while the brand has been treading around 200K in the USA.
            *Many millions* of diesel passenger vehicles had been sold in Europe, Australia, and Asia up to 2016 while in the US those engines were a niche market for HD trucks and Eurocar superfans.

            Right now, EV sales in the US consist of the Model 3 and then a bunch of low volume curiosities (see the chart link below). Even with the Model 3, it’s about equal to Chevy Colorado volume. That’s not bad, but there is a ton of distance to go if EVs are going to become the default propulsion method rather than a minor segment in an ICE world.

            insideevs.com/news/357565/ev-sales-scorecard-june-2019/

            Maybe things looks far different in Europe and Asia, but barring a Model T-level breakthrough I just don’t see where an EV market share explosion is going to occur in the US. Maybe the “EV Revolution” is largely going to be an international phenomenon?

          • 0 avatar
            ToddAtlasF1

            The last Model-T level breakthrough cast EVs on the ash-heap of history for a century.

          • 0 avatar
            Asdf

            @Probert: Hundreds of thousands of BEVs are sold ONLY because tax payers are forced to pick up the tab, and because of sinister politicians. BEVs would hardly have had any market share AT ALL if it weren’t for that, thus BEV adoption is due to market manipulation, not consumer preference. Let BEVs compete on their own merit, and then see whether things are REALLY happening (hint: they’re not).

          • 0 avatar
            mcs

            Seriously, one of my favorite features of an EV is the fuel-at-home aspect. Lots of good things about them, but for me, that’s the one near the top.

    • 0 avatar
      mcs

      A BEV is even faster than 5 minutes. A BEV takes zero minutes since it has 100% range when you get into it.

      A fossil car has to be taken somewhere to be fueled. It takes time to get to the location. Once you get there, you sometimes have to wait minutes to even start fueling. While fueling, you have to be standing next to the vehicle controlling the flow in some cases. Sometimes the pump clicks off or the carcinogen you are putting in the vehicle splashes out on you and even worse, the paint of your car.

      Of course, while you are at the gas station you face all kinds of dangers. Besides having to wait to fuel because some guy is blocking the pump while he’s inside buying scratch tickets, you could get car-jacked. Just google “gas station carjacking” (damn, that’s actually kind of scary hmmm) and look at the results. Usually, google will give you the local stories first. Actually, that seems to for any crime like “gas station rape”. I was trying to be funny, but damn, this stuff is real (and will eventually apply to public charging stations, but at least you can lock yourself in the car or go someplace safe).

      So fueling a fossil car takes more than five minutes so therefore all fossil cars should be recalled (that’s going to suck) immediately. Besides, you have to deal with all kinds of potential crime, getting cancer, or worst of all, a scratch ticket buyer (yes, they drive me crazy – “do have the christmas in july card? no, how about the lucky forth? you do, no that’s the wrong one, i want the one with the fireworks oh what’s that one I’ll take two of those” then they come out scratching the ticket about to get in their car and then they get a two dollar winner and have to go back again)

      • 0 avatar
        Asdf

        MCS, you’re lying through your teeth (or you’re so retarded that you actually believe what you say, in which case you ought to be locked up in an asylum somewhere). A BEV does NOT take zero minutes to recharge, on the contrary the it takes anything from about half an hour to SEVERAL HOURS of downtime for a BEV to be fully recharged. (What the owner is DOING while the BEV charges is of course COMPLETELY IRRELEVANT, contrary to the “opinion” of BEV retards, as that has no impact on the time it takes for the charging process to complete.)

  • avatar
    MBella

    Why waste resources on more lithium battery technology. For some reason the same people afraid of peak oil are really ignoring how limited of a commodity lithium is. Any type of long term EV future will depend on a new battery technology.

    • 0 avatar
      Lorenzo

      Why stop at lithium? There are finite supplies of cobalt too. Solve both of those material bottlenecks and there’s still a complicated and expensive manufacturing process that will limit availability of batteries for the mandated volumes of plug-in and hybrid cars. Then you have to sell them without tax incentives to people, many of whom would rather have ICE’s.

    • 0 avatar
      HotPotato

      Lithium is hardly a rare commodity.

  • avatar
    Roader

    “European Commission Vice President Maros Sefcovic is targeting 100 billion euros ($113 billion) for the program…The cash will be spread about liberally between manufacturers and parts suppliers…”

    Well of course it will. Another great idea: to reduce CO2, cut taxes on diesel fuel and encourage Fritz and Manon to buy diesel cars. What could go wrong?

  • avatar
    ToddAtlasF1

    How about not accepting migrants from places with tiny carbon footprints into welfare societies with huge carbon footprints? It’s just a thought, before thinking is outlawed for good in Europe.

  • avatar

    “build the best battery cells in the world in Europe and Germany.”

    I thought Germany was part of Europe LOL. Seems I was wrong.

    On the serious note Europe not a once shoot itself in foot with all that Government intervention in free market like pushing diesel engines against will of people. That turned out to be a sheer idiocy. Do they really consider China as a role model? Do they really want to become another China?

    • 0 avatar
      Asdf

      Europe pushed diesel engines BECAUSE of their increased NOx emissions. There’s no other plausible explanation. It makes quite a bit of sense too, because those increased emissions laid the groundwork for future taxation of cars, as well as outright bans of a large amount of cars, policies very much in tune with what Europe wants.

  • avatar
    cprescott

    Once upon a time Europeans thought diesel was the nirvana of their dreams. Once it was discovered that diesel’s success was just a dream, now Europeans are salivating at ravaging the planet for rare earth metals, passing the consumption of energy to the processing of the raw materials in someone else’s country, and then claiming “we are green” because we build the batteries of the green generation.

    I’m old enough to see this is merely passing off your direct environmental trash onto someone else and then you get to wear the Green Fair Prize Ribbon for not having any tail pipe emissions.

    • 0 avatar
      HotPotato

      To be fair, diesel DID reduce C02 emissons vs. gasoline, and by a lot. Frankly, a nice little turbodiesel is also much more pleasant to drive than a the breathless, high-revving, small-displacement gasoline engines Europeans previously drove to achieve high fuel economy.

      The trouble is, once you’re the leader in something — in Europe’s case, passenger-car turbodiesels — you want to keep doing that thing and ignore alternatives to that thing…maybe even cheat to keep what you’re doing viable.

      Once upon a time, when Americans led the car industry, they had the same problem. Who would want some loud, tinny Honda when they could have a plush Caprice Classic, amirite Bob?

      So along comes China to eat the West’s lunch. It doesn’t have any legacy greatness to protect in its auto industry. It sees its potential greatness in pushing forward the next innovation: BEVs.

      • 0 avatar
        Roader

        “So along comes China to eat the West’s lunch.”

        I remember back in he 80s when ‘everyone’ was convinced that Japan would eat the West’s lunch. How’d that work out?


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