Europe set to build nearly 50 new lithium-ion battery factories by 2030 – but projects at risk of being downgraded or delayed

Nearly 50 lithium-ion battery factories are to be built in Europe by 2030, whereas they are almost non-existent today.

Germany is the most advanced country with the equivalent of 498 GWh of projects in the pipeline, followed by Hungary (224 GWh) then Norway (136 GWh). France only comes fourth with 122 GWh, according to monitoring by the NGO Transport and Environment. A fourth factory project has been confirmed by the Taiwanese group ProLogium in Dunkirk, where President Emmanuel Macron will visit on Friday.

Downgraded projects

But according to the NGO, 68% of these projects risk being “revised downwards, delayed or interrupted”, in particular because of American competition boosted by subsidies from the Inflation Reduction Act (IRA). This plan of the American government provides colossal tax credits for the green industry and the energy transition, in order to counter the rise of Chinese power.

“The core of the IRA is electricity tax reductions to fund green electricity,” says Tobias Gehrke. Hydrogen, for example, has become much more affordable thanks to this legislation.

Europe suffers from an enormous problem of competitiveness: “we pay twice for electricity compared to China”, deplores Mr. Gehrke. It is necessary “to subsidize energy so as not to be off the hook. The Americans understood this very well with the IRA,” he adds. In December, lithium-ion batteries cost 24% more in the United States than in China. In Europe, they were 34% more expensive.

For the researcher, the objective of Europe to produce all the batteries necessary for its automotive industry on its soil by 2030 seems unrealistic at this stage. Another major handicap: access to critical materials – graphite, lithium, nickel, manganese and cobalt – whose supply chain is largely controlled by China.

Europe starts from afar

China notably controls 75% of lithium refining and 50% of cobalt and should retain its leadership in battery production for the next five years, according to BloombergNEF forecasts.

However, Europe has started to react “with the Critical Raw Material Act which defines the objective of having strategic partnerships and having a common purchasing platform at European Union level”, explains Diane Strauss , Director of Transport and Environment France.

“Europe is slightly ahead of the United States in terms of electric vehicle adoption”

If Europe does not develop “the same firepower as the American IRA”, it has allowed member states to “unlock state aid much more easily”, she welcomed.

Europe is starting from afar in the face of a very advanced China and the United States with unrivaled financial power, but it can count on its internal market, one of the first for electric vehicles, even if China is still ahead of it. “Europe is slightly ahead of the United States in terms of electric vehicle adoption,” says Gilles Normand, vice-president of ProLogium, which wants to open its Dunkirk plant by the end of 2026.