2023-06-20 17:54:00
The Court of Auditors of the European Union has raised concerns regarding the production of electric batteries in Europe. According to the institution, the number of electric batteries produced on the Old Continent may not be enough to meet demand.
For several years, Europe has been trying to catch up in terms of the production of electric batteries. The stated ambition is very strong to compete with the many battery factories established in Asia (CATL in China, LG in South Korea, Panasonic in Japan). Today, China accounts for 76% of world production of electric batteries when the Union weighs only 7%.
What position for Europe on the global battery market?
Automaker Volkswagen plans to build six plants across Europe. Germany is the country that dominates the European market in the production of batteries for electric vehicles, with 498 GWh of projects in the pipeline. Just behind we find Hungary, Norway and finally France in fourth position with “only” 122 GWh. This despite the four large projects recently promised in the valley of the battery in four cities of Hauts-de-France.
In addition, in the near future the major player in electric batteries in Europe might well be Tesla. The American manufacturer has planned to set up a battery factory near its Gigafactory in Berlin. This should have an annual capacity of 100 GWh, with a possible extension to 250 GWh. A real war machine.
In all, no less than 50 lithium-ion battery factories are to be set up in Europe by 2030. If that seems enough on paper, this is not exactly the opinion shared by the Court of Auditors of the European Union, nor by researchers. According to Tobias Gehrke, geo-economics researcher at the European Council on Foreign Relations (ECFR), “Europe has the means to compete. We are currently in an acceptable position, but the pressure is mounting.”
The European Union might lose the race
According to its work, 68% of current construction projects are at risk of being scaled back, delayed or interrupted. In question : American and Chinese competition. The European Union no longer wants heat engines by 2035, but does it have the means to match its ambitions? In other words, this is where the Court of Auditors is coming from.
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????️“The EU must not end up in the same dependent position with batteries as it did with natural gas; its economic sovereignty is at stake.
???????? is betting heavily on batteries, but it might have the weaker hand in the access to raw materials, attractiveness to investors & costs.”
— European Court of Auditors (@EUauditors) June 20, 2023
In a rapport published Monday, June 19, 2023 the institution believes that “a new strategic impetus is needed”. We can read that despite the strategic initiatives taken in 2008, “the battery value chain in the Union remains highly dependent on supplies from third countries”. The Court of Auditors even anticipates a shortage of raw materials for batteries.
For Annemie Turtelboom, head of audit for the Court of Auditors of the European Union, “the chances of the Union becoming a world leader in the production of batteries do not seem good”. According to the institution, the European Union might even miss his target to sell only new cars with zero emissions in 2035. The European Union must absolutely avoid finding itself with batteries in the same position of dependence as “the one it knew with gas towards Russia”.
The main problem would be in the very availability of the raw materials necessary for the manufacture of the batteries. For cobalt, nickel, lithium, manganese, and natural graphite, five key raw materials for the manufacture of batteries, Europe cannot be autonomous. The Old Continent 78% dependent on imports from a small number of countries.
Some of these countries are subject to significant geopolitical risks. This is the case of the Democratic Republic of the Congo or China. Factors that can “jeopardize the supply of raw materials”. According to the report of the Court of Auditors of the European Union, it is even possible that “European battery production is facing a global shortage of essential raw materials”. And that from 2030.
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Europe will have a hard time catching up with China and the United States in the battery market despite all efforts to do so. Securing access to raw materials seems to be the sticking point. We are late in exploiting the minerals available in European subsoils. The case of Portugal is a good example. The country is the EU member state with the largest known reserves of lithium within the European Union. Reserves quantified in 2017 but which will not be exploitable before 2026 due to the necessary authorization procedures. The delay accumulated over all these years might well be fatal to Europe in the race to produce electric batteries.
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