Can Europe build a better battery?
While electric and hybrid vehicles are gaining ground across the automotive market, there are still some hurdles to consumers embracing them, and one of the most pressing concerns the battery. Current technologies still mean batteries have to be regularly recharged, and the market will not meet its potential until this ‘range anxiety’ is resolved. However, the French and German governments are addressing this issue, forming a multi-billion-euro partnership to find a solution.
The alliance, announced early in May, aims to establish the first European battery consortium, an ‘Airbus for batteries’. It includes French carmaker PSA with its German subsidiary Opel and the French battery manufacturer Saft, which is part of the Total Group. The French and German governments pledged €5-6 billion to the project, of which €4 billion should come from 35 private firms, including top automakers and energy groups.
The alliance comes on the back of European Commission efforts to encourage national governments to increase investment in the area. Officials have warned that Europe is falling behind in electric vehicle development because of its failure to make advances in battery technology: while US-based Tesla is leading at the high end of the market, China is investing heavily in entry-level electric vehicles. A report published in April by the European Court of Auditors (CoA) warned that Europe could be left behind in battery building.
Announcing the battery alliance, French Finance Minister Bruno Le Maire said the investment, “shows Europe is not fated to depend on technological imports from the two powers that are the United States and China”.
Le Maire was speaking with German Finance Minister Peter Altmaier at the third political meeting of the European Battery Alliance, launched in October 2017, which includes the Commission, key EU countries, the European Investment Bank, industry stakeholders and research and development experts. EU Energy Commissioner Maros Sefcovic said the alliance was gaining momentum, “but at the same time, we cannot be naïve, as we are catching up slowly.”
One of the first projects for the alliance will be a pilot factory with around 200 employees in France which will open in the coming months. Other consortia have been launched in the context of the alliance, including a cooperation between Sweden, Finland and Portugal on raw materials; between Belgium and Poland on chemicals; between Sweden, France, Germany, Italy, and the Czech Republic on battery cell production; and between Belgium and Germany on recycling.
Indeed, an estimated €100-billion has been invested in battery related projects across Europe, according to EIT InnoEnergy, from raw material extraction and processing, to end products such as li-ion batteries and electric vehicles. These projects include the Northvolt gigafactory in Sweden that is expected to produce 32 gigawatt hours of battery capacity each year by 2023.
China currently dominates world production for lithium ion cells, accounting for 60% of the global total, with Japan second at 17% and Korea third at 15%. The EU currently accounts for just 1% – and while this number should rise to 10 to 15% by 2025 (according to France-based technology consultancy firm Avicenne Energy), it is mainly thanks to investment in new factories by the likes of South Korea’s LG Chem and Samsung, and China’s CATL.
All this is a huge change in the industry. Just 20 years ago, it would have been unimaginable to see every major car and truck manufacturer developing electric and hybrid vehicles. That is what we are seeing now. The issue for Europe is whether it can lead in this new battery driven market.