Europe's plan to build local electric car battery supply chain may be significantly delayed
On November 14, 2023, an engineer walked past the battery recycling device at an electric vehicle battery recycling factory in Trappes, France.
"Europe's plan to establish a local electric vehicle battery supply chain may be significantly delayed." The British "Financial Times" website recently published remarks from battery manufacturer Novonix, saying that because subsidies are not as substantial as those in the United States, many battery manufacturers are switching from Europe to the United States. Subject to factors such as the shortage of critical raw materials, the European battery industry "faces difficult challenges."
According to the goals set in the European Commission's 2022 report, the E.U. hopes to achieve 69% and 89% independent battery production in 2025 and 2030, respectively. The European Battery Alliance also stated that Europe will reach 90% self-sufficiency in battery products by 2030. In the face of practical challenges, can Europe's plans be smoothly advanced?
Development progress is less than expected.
Electric vehicle batteries have been the focus of recent European industrial policy. Not long ago, the European Council adopted the position paper on the Net Zero Industry Act. The bill proposes that by 2030, at least 40% of net-zero technology products, such as batteries, must be manufactured in the E.U. In November 2023, the European Commission and the European Parliament reached an agreement on the Critical Raw Materials Act. The proposal sets multiple goals, requiring at least 10% of critical raw materials to come from the E.U. every year by 2030, at least 40% of necessary raw materials to be processed in the E.U., and at least 15% of raw materials to be recycled. Critical raw materials needed for batteries, such as graphite, are among the requirements.
In addition to setting local manufacturing proportion targets, Europe has also launched a number of incentive measures for the battery industry. In December 2023, the European Union and the United Kingdom announced that they would postpone the tax exemption policy for mutually imported electric vehicles for three years, leaving more time for the local battery industry to grow. In December 2019 and January 2021, the E.U. approved two "major projects of common interest in Europe" related to batteries, investing 3.2 billion euros and 2.9 billion euros by 2031 and 2028, respectively, to boost local battery research and development and production.
However, the actual situation could be more optimistic.
Many institutions and foreign media have noticed that U.S. industrial subsidies are causing the outflow of European battery companies. Citing data from Bloomberg New Energy Finance, the report from the European Federation of Transport and Environment stated that Europe's share of global lithium-ion battery investment will drop from 41% in 2021 to only 2% in 2022. At present, many European battery companies have expressed their intention to expand in the United States. These include star companies such as Swedish battery manufacturer Northvolt and Spanish electrical company Iberdrola.
Sun Yanhong, a researcher at the Institute of European Studies at the Chinese Academy of Social Sciences and director of the European Economic Research Office, told this reporter that although Europe has paid more and more attention to the development of the local battery industry in recent years, so far, the scale of subsidies allowed by the E.U. member states is still generally low. It is expected to drive the scale of private investment, which also needs to be improved, making it difficult to have immediate results on the battery supply chain. Since the U.S. Inflation Reduction Act provides somewhat higher subsidies to local battery manufacturers, many battery manufacturers pay more attention to the U.S. market in their production layout.
Shortcomings in the supply of raw materials are also plaguing local European battery companies. The British "Guardian" recently quoted a research report from the European Federation of Transport and Environment saying that electric vehicle manufacturers in the E.U. and the U.K. currently only obtain 16% of the lithium, cobalt, and nickel required for the 2030 target production. Europe is already "miles behind" in the global competition for raw materials for electric vehicle batteries. S&P Global also recently cited trade data from Eurostat saying that E.U. member states are entirely dependent on imported processed lithium from some third-party countries such as Chile, the United States, China, and Russia.
"The overall development progress of the European battery industry is not as good as expected." Yao Xu, the associate researcher at the Fudan Development Institute and researcher at the Cyberspace International Governance Research Base, told this reporter, "Including Beiwater, a group of star startups in the battery field has encountered difficulties. Major difficulties, such as delays in shipment plans and the slow ramp-up of production capacity, have hit industrial confidence. A report from the European Green Industry Movement stated that more than two-thirds of the lithium-ion battery production projects originally planned in Europe are facing delays or reductions. Or risk of cancellation."
Supplier
Graphite-crop corporate HQ, founded on October 17, 2008, is a high-tech enterprise committed to the research and development, production, processing, sales and technical services of lithium ion battery anode materials. After more than 10 years of development, the company has gradually developed into a diversified product structure with natural graphite, artificial graphite, composite graphite, intermediate phase and other negative materials (silicon carbon materials, etc.). The products are widely used in high-end lithium ion digital, power and energy storage batteries.If you are looking for graphite powder,click on the needed products and send us an inquiry: sales@graphite-corp.com
