Sunday, March 26, 2023

Europe may stop relying on Chinese batteries if the US doesn’t stop it

More than half of all lithium-ion batteries needed for cars produced in the EU will be produced in Europe by 2022, following investments in the Gigafactory in recent years. In fact, the billions of euros being invested in battery manufacturing could mean that, In four years, the European plants where these electric vehicles are assembled will be closed on the basis of the Chinese Gigafactory, In addition, two-thirds of the cathode demand can be met here in the same period.

In fact, according to estimates by Transport and Environment (T&E) More than half of refined lithium could come from European projects such as those underway in Germany and France by 2030.

The greatest risk of non-completion of these periods isHowever, not in a possible response from China, but in the United States, Whereas, in August 2022, the Inflation Reduction Act (IRA), This rule may cause companies to divert their industrial projects from Europe to the United States.

So much so that there has skyrocketed investment in battery factories, mines and electric car production. The law has a future requirement that 40 percent of battery metals, or half of battery components, must be manufactured in that country by 2024.

These limits will increase over time, so that the percentage of the material reaches 80 percent by 2027, and batteries will be fully manufactured there by 2029. These decisions, which clearly favor local industries, however, run counter to one of the lessons learned in the pandemic: the resilience and resilience of supply chains.

When it went into effect, the tax deductions that buyers could qualify for were applied exclusively to vehicles that were final assembled in the US, but in future, the tax credits would apply to manufacturers .

To counter these policies and not risk losing investment, T&E estimates EU needs to invest more money to support European green industries And do it through a European Sovereign Fund. Other sources estimate that ecological policies should be linked to the creation of national employment.

Currently, an official working group is underway in which the European Union and the US participate, although sources such as the World Economic Forum caution that it should be open to the participation of other countries, such as Japan, South Korea, Brazil. ..

Nation World News Desk
Nation World News Desk
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