If Volkswagen is going to build its first battery factory in Europe, the manufacturer could turn to the United States for the next ones. Unless the European Union decides to act to encourage manufacturers to develop on the Old Continent.
And the major production of batteries for our electric cars is currently done in China, with players like CATL or BYD in particular, this could soon change. Indeed, many manufacturers and equipment suppliers are now turning to Europe as well as the United States. New factories should emerge on the Old Continent, as sales of electric cars accelerate. So much so that they overtook diesel in France in December.
A strong financial 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 now ready to assemble accumulators in Berlin, while Volkswagen has just started construction of its plant 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 putting its plans for new European factories on hold for the time being. The manufacturer wants to put pressure on the Commission, which recently voted in favor of banning thermal cars in 2035. Volkswagen is awaiting a response from the major authorities to the American 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 from 2024 on North American territory“. More concretely, almost a third of the cost of a car battery can be covered by the US government.
Additionally, electric cars made across the Atlantic also enjoy a $7,500 tax credit for customers. Aid that could particularly benefit Tesla, whose cars are now eligible for it.
But to qualify, the batteries must also be manufactured on US soil. This is why the government wants to help builders set up shop there, which will also allow the country to reduce dependence on China. In Europe too, specialists are worried about the rise of Asian brands, but no one is acting for the moment.
A response expected from Europe
Thus, the manufacturer, relayed by Automotive Newsexplains that it is maintaining its objective of produce 240 GWh of batteries in Europe by 2030, but for that, he feels he needs a framework and better conditions. Thus, it is now awaiting a response from Europe, which should soon announce its own version of the “Inflation Reduction Act (IRA) American.
For the record, the former head of the group Herbert Diess announced in 2021 his plan to set up six new factories in Europe, and in particular in Hungary, Poland, the Czech Republic and Slovakia, in particular in partnership with Northvolt. Volkswagen indeed owns 20% of the company specializing in the manufacture of batteries.
She is also hesitant to set up its next site in the United States rather than in 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 were done.
Tesla, for example, plans to now focus on the United States to produce its new latest generation 4680 cells. In Europe, theinvestments fell by 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. As a result, and as AFP points out, Europe could miss out on billions of euros in investment. In addition, production on the Old Continent would be cleaner, thus reducing logistics and transport.
What solution for Europe?
But in Europe, it will be much more difficult to fight the IRA plan (Inflation Reduction Act) of the United States as pointed 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 before next July, during the discussions which will take place on the european sovereignty fund.
The preferred track is that of a common loan, like the COVID plan. But some countries like Germany are not open to it. The next few months therefore promise to be decisive for the creation of a European “green industry”.
Want to join a community of enthusiasts? Our Discord welcomes you, it is a place of mutual aid and passion around tech.
