EU promises billions to kickstart European EV battery industry

As Europeans embrace the shift to electric vehicles, with sales of plug-in vehicles reaching 1 million after soaring by 40 per cent in the first half of 2018, according to figures from EV Volumes, the European Union is looking to ignite its own EV battery industry.

The EU currently has no large scale EV battery industry to speak of: while Daimler announced plans in July to begin production of its own batteries at its Mercedes-Benz plants in Sindelfingen and Untertuerkheim and VW has made similar noises, and other European automakers are historically dependent on Asian suppliers.

“The lack of European cell manufacturing base puts the EU at a competitive disadvantage — it jeopardises the position of EU’s industry because of security of supply chain issues and increases costs due to transportation, time delays, weaker quality control or limitation on the design,” the EU states on its website.

China’s BYD is already eyeing the market, having stated in recent months it is seeking to make Brussels home in order to meet EV battery demand in Europe.

The European battery storage market likely to be worth €250 billion ($A405 billion) from 2025, and it last year put together a “battery alliance” in order to get European players to catch up and stake a claim in the growing market.

Recognising what the establishment of a strong home-grown battery industry could mean for EU residents—4-5 million jobs, it says — the EU has promised to provide high levels of state funding to companies who want to start making lithium-ion batteries to provide to local car manufacturer.

This includes €200 million for battery projects, €800 million to build demonstration facilities and funding for regions who want to promote the battery industry.

Since then, progress has been quick, according to Vice-President for Energy Union Maroš Šefčovič.

“We are now building a whole competitive value chain in Europe, with sustainable battery manufacturing at its core. And we are doing this at light speed,” he said in a statement to the press.

A number of companies and consortiums have already begun making plans to take advantage of the EU’s strategic plan, including battery makers SAFT and BASF, electrolyte producer Solvay, and Siemens who are currently piloting production lines and working on establishing an entire cell manufacturing value chain.

More significantly is the partnership announced only today between German carmaker BMW, Northvolt and Umicore.

With plans to start production as early as mid-2019, Swedish battery company Northvolt and Belgian materials and recycling group Umicore will work with BMW to create a “closed life cycle loop” recyclable battery design.

The EU also recognises that investment in infrastructure is also paramount for the electric car industry to continue to succeed, and is supporting the rollout of infrastructure through the Connecting Europe Facility (CEF).

So far, €22.3 billion has been deployed to support 641 projects, and made available €450 million to finance alternative fuel infrastructure through the InnovFin Energy Demo Projects (EDP) and CEF Debt Instrument.

Hydrogen is also on the agenda, with the EU investing €665 million in the Fuel Cells and Hydrogen Joint Undertaking of the Horizon 2020 framework programme.