Tuesday, September 26, 2023

Does Europe depend on China for electric cars?

After Ursula von der Leyen, President of the European Commission, announced last week that she would launch an anti-dumping investigation into Chinese electric cars, many voices have spoken out on the issue. On the surface, this decision was made to try Avoid a case like that of the solar panels of 2012.

However, there seem to be many more reasons. According to reports Reuters says a document prepared for EU heads of state and government Europe could become so dependent on China for lithium-ion batteries and fuel cells by 2030 Just as Russia was in favor of Ukraine’s energy supply before the war unless it took strong measures.

This report will be Basis of debates about Europe’s economic security which will take place in Spain early next month. The aim is to find solutions to reduce the risk of European countries becoming too dependent on China.

Furthermore, this study also points out that due to the intermittent nature of renewable energy sources such as solar or wind, Europe will need energy storage options to achieve its goal of net-zero carbon dioxide emissions in 2050.

“This will increase our demand for lithium-ion batteries, fuel cells and electrolyzers, which is expected to multiply ten to thirty-fold in the coming years,” says the document prepared by the Spanish EU Council Presidency.

Although it is true that European manufacturers have strengthened and made progress in the intermediate and assembly phases of electrolyzer manufacturing in recent years, they still rely almost exclusively on China for the supply of lithium, a crucial mineral for the production of car batteries.

“Unless strong action is taken, by 2030 the European energy ecosystem could face a dependence on China of a different nature but of a similar severity to that which existed before Russia invaded Ukraine,” the report said.

In fact, according to 2021 European Commission data, the EU sourced more than 40% of its total gas consumption, 27% of oil imports and 46% of coal imports from Russia. The end of most energy purchases from Russia caused a shock to energy prices in the EU and a spike in consumer inflation, forcing the European Central Bank to sharply raise interest rates, leading to a slowdown in economic growth.

A similar scenario could occur in the area of ​​digital technology” says the document. “Forecasts indicate that demand for digital devices such as sensors, drones, data servers, storage devices and data transmission networks will increase significantly this decade.”

“The EU has a relatively strong position in this last area, but shows significant weaknesses in the others,” he adds.

If this continues until 2030, just before Europe’s deadline to ban sales of internal combustion cars, this reliance on China could cause serious difficulties for the industry by preventing it from increasing productivity.

Nation World News Desk
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