Europe, to get rid of the Sino-American competitive stranglehold, is launching a major offensive in the battery production war.
While the price of electric batteries is in free fall, the global race in their production does not stop. Competition there is very tough, and Europe is lagging behind other major players, such as the United States or China. The EU therefore chose to tackle the problem and released a large amount of funding to support the implementation of a Northvolt factory in Germany to position itself against its rivals.
A strategic move to stay in the race
In view of the expansion of Chinese and American industries, the European Union has taken a radical decision. According to Margrethe Vestager, Competition Commissioner, it is “ the first aid authorized by the European Commission » of this type to be approved. A decision which explicitly aims to prevent major industrial initiatives from escaping from the continent to the United States.
A bit like the Chips Act, the European Commission adopted in March 2023 a new set of regulations to revitalize and “ facilitate state aid for projects helping to reduce the European Union’s CO2 emissions “. A clear response to the American Inflation Reduction Act and the numerous Chinese subsidies in favor of the electricity production industry. The risk of seeing European companies flying to Asia or the USA should theoretically be reduced.
A victory for Northvolt… and for Germany
It is therefore the Swedish company Northvolt (leader in the manufacture of batteries for EV) which finds itself the big winner of this new strategic shift. The amount of the envelope, 902 million euros, will greatly facilitate the construction of this future battery factory in Germany. Planned to produce the equivalent of 60 GWh per year (i.e. the equivalent of equipping one million EVs annually), it still almost passed us by.
Indeed, Peter Carlsson, CEO of the company, had expressed some uncertainties in October 2023. “ The project could be postponed » he said. Without this injection of funds, it is almost certain that Northvolt would have chosen to give in to the advances of the Biden government. It is therefore a victory for Northvolt, for Europe, but especially for Germany, which will largely remain at the head of battery production in the Old Continent. The factory will be ready for production in 2026.
Sources: Clean Automotive, The Argus
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