If Volkswagen is to build its first battery factory in Europe, the manufacturer could turn to the United States for future ones. Unless the European Union decides to act to encourage manufacturers to develop in the Old Continent.
AND the largest production of batteries for our electric cars is currently in China, with players like CATL or BYD in particular, this could change soon. In fact, many equipment manufacturers and suppliers are now turning to Europe and the United States. New factories should emerge in the Old Continent, as electric car sales accelerate. So much so that they overtook diesel in France in December.
A strong economic incentive
In addition to the Chinese giant CATL, recently established in Germany, several companies plan to build battery production plants in Europe, such as Verkor and ACC. For its part, Tesla is ready to assemble batteries in Berlin, while Volkswagen has just started construction of its factory in the city of Salzgitter, Germany. If other sites are also planned, the firm could finally revise its plans.
Indeed, and as explained by the AFP press agency relayed by the site Knowledge of Energies, the German group is suspending for the moment its plans for new European factories. The manufacturer wants to put pressure on the Commission, which recently voted to ban thermal cars by 2035. Volkswagen is waiting for a response from the main authorities to the US subsidy plan.
For the record, the United States proposes grants of up to several billion dollars to battery manufacturers of which half of the components would be manufactured as of 2024 in North American territory“. More specifically, almost a third of the cost of a car battery can be covered by the US government.
In addition, electric cars made on the other side of the Atlantic also enjoy a $7,500 customer tax credit. An aid that could especially benefit Tesla, whose cars are now eligible for it.
But to qualify, the batteries must also be made on US soil. That’s why the government wants to help builders set up shop there, which will also allow the country reduce dependence on China. In Europe too, specialists are concerned about the rise of Asian brands, but no one is acting for the moment.
An expected response from Europe
Thus, the manufacturer, relayed by automotive newsexplains that he maintains his goal of produce 240 GWh of batteries in Europe by 2030, but for that he feels he needs a framework and better conditions. Thus, he is now awaiting a response from Europe, which should soon announce its own version of the “Inflation Reduction Law (IRA) American.
For the record, former group boss Herbert Diess announced in 2021 his plan to establish six new factories in Europe, and in particular in Hungary, Poland, the Czech Republic and Slovakia, in particular in partnership with Northvolt. In fact, Volkswagen owns 20% of the company specialized in the manufacture of batteries.
She also doubts set up your next site in the United States instead of Germany. An alarming situation for the Transport & Environment organization, which sounded the alarm in a recent report. The NGO explains that 68% of battery production projects in Europe could be postponed, reduced or simply eliminated by 2030 if nothing was done.
Tesla, for example, plans Now focus on the United States. to produce their new state-of-the-art 4680 cells. In Europe, theinvestments fell 41% in 2021 and there is an urgent need to address this as the US and China could end up dominating the market even more. Consequently, and as AFP points out, Europe could lose billions of euros in investment. In addition, production in the Old Continent would be cleaner, thus reducing logistics and transportation.
What solution for Europe?
But in Europe it will be much more difficult to combat the IRA plan (Inflation Reduction Act) of the United States as it points out Economic Alternatives. All Member States must agree on a single plan, at the risk of creating internal competition in Europe between countries. Europe’s response is not expected until next July, during the discussions that will take place on the European sovereignty fund.
The preferred route is that of a common loan, such as the COVID plan. But some countries like Germany are not open to it. Therefore, the next few months promise to be decisive for the creation of a European “green industry”.
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