The crisis in raw materials and components has brought out all the disadvantages of dependence on China for supplies that have an impact on the production stability of industries. There production of lithium cells and batteries it is one of the strategic dependencies which already in China allows CATL to lead the game. Europe, latein terms of commercial incentives, risks scaring away capital attracted by the United States, which is much faster in the approval of the plan Inflation Reduction Act (IRA) of $370 billion to stimulate the production of green technologies. An analysis by Transport & Environment estimates that the risk of relocation of investments to the USA it could mow 66% of expected battery production in Europe and 48% of that in Italy. Here is the data in detail.

THE UNITED STATES ALREADY HAS AN INCENTIVE PLAN FOR BATTERY PRODUCTION

On March 14, 2023, the publication of the Net Zero Industry Act plan is expected, with which the European Commission it will match subsidies US to boost lithium battery production and other low-emission technologies. This plan alone may not be enough if the action is not aimed at simplifying authorizations and building permits for factories. An emblematic case of what is happening is Ital Voltaccording to the T&E report: “the project initially envisaged in Scarmagno near Turin could be delayed or reduced in favor of its twin Statevolt in California. At present, there are still uncertainties regarding the financing and authorizations necessary for the construction of the plant which should be built in Piedmont”.

ANALYSIS BY T&E OF THE 50 GIGAUSINES OF BATTERIES PLANNED IN EUROPE

The organization analyzed public data from construction projects for the 50 factories expected in Europe assess:

• the financial soundness of the projects;
• authorization status;
• the certainty (or uncertainty) of a place of production.

According to the report 1.2 TWh of European production of lithium batteriesintended to equip 18 million electric cars, would be high or medium risk interruption or relocation. The countries most likely to lose their currently projected industrial capacity would be Germany, Hungary, Spain, Italy and United Kingdom. Click on the image below to see it full width.

Some concrete examples cited in the study:

• Germanywith You’re here (in Berlin), leads a high risk losing all battery production, after the company announced that it wanted to take advantage of IRA incentives and concentrate cell manufacturing in the USA;
• Germanywith Northvolt (in Heide), runs a medium risk, as the company has only secured part of the funding and construction of the plant has yet to begin. Additionally, Northvolt’s chief executive said he may delay the project to prioritize US expansion, according to T&E;
• United Kingdomwith UK Volts (in the West Midlands), runs the risk of losing a gigafactory that he owes avoid collapse.
• Serbia and Spainwith Inobatwhich would have slowed down plans in the EU after securing incentives in the state of Indiana (USA) for a joint venture.

Click on the image below to see it full width.

BLOCKING IMPORTS IS NOT ENOUGH TO COMPETE WITH GLOBAL ECONOMIES

The T&E report cites data from BloombergNEF, according to which the European share of new investments in the production of lithium batteries globally has declined from 41% in 2021 to 2% in 2022. The ability of governments will be to attract capital, as is the case in the United States and China. One should not underestimate the power in the hands of the countries which control the deposits of raw materials necessary for the production of cells and batteries. In this, China does not have many rivals, despite the political campaign for Donald Trump Presidential Election 2024 is based on promise to block all imports from China. “Europe’s response should mirror the US Inflation Reduction Act as closely as possible in terms of investment focus, simplicity and visibility”he stated Charles Tritopolitical manager of T&E Italia. “To be competitive, the EU must have a strong industrial policy focused on increasing production and capable of rewarding and accelerating environmentally sustainable projects”.