With Europe expected to lead the world in electric-car sales for a second straight year, an epic rush to build a battery-supply chain from scratch is playing out across the continent. After years of ceding the EV battery business to foreign companies, Europe wants in. Prospective manufacturers are popping up in the Nordic region, Germany, France, the U.K. and Poland in a transcontinental competition to chip away at the dominance of China’s Contemporary Amperex Technology Co. Ltd. and South Korea’s LG Energy Solution.
“We’re creating a new industry in Europe; we’re creating a completely new ecosystem,” Maros Sefcovic, the European Commission vice president overseeing the battery initiative, said in an interview. “The investments are really pouring in.”
Sefcovic estimated the planned investments just for 2019 to be about 60 billion euros ($71 billion), triple that being spent in China. Those eye-watering totals cover the entire supply chain, from materials and cells to assembly and recycling.
Battery Battle
Europe will have a third of global production by 2030
Source: BloombergNEF
Note: Total capacity estimated to reach 2,262 GWh
Amid tougher emissions rules and fines for violating them, sales of EVs — both battery-electric and plug-in hybrid models — in Europe more than doubled last year to about 1.3 million units, topping China for the first time.
That could reach 1.9 million this year as VW, Stellantis NV and BMW AG map out plans for new models and higher output, and Ford Motor Co. and Volvo Cars commit to going almost all-electric.
Those ambitions will require a lot of power packs, and the local auto industry’s reliance on overseas suppliers grates on political leaders in Germany, France and Brussels. They are loathe to have local automakers, which are major employers, be reliant on battery makers based outside the region.