Today, the majority, if not to say almost all battery production in the world is carried out by China and, in general, the Asian continent. Recent measures taken by the United States should somewhat reverse the trend in the coming years, while Europe looks to catch up on its considerable lag.

According to Tobias Gerke, geoeconomics researcher at the European Council on Foreign Relations (ECFR), “Europe has the means to remain competitive, but the pressure is growing”. In effect, Almost 50 lithium-ion battery plants are expected to be built in Europe by 2030whereas today they are almost non-existent.

A few shaky projects?

Germany leads with the equivalent of 498 GWh of projects in the pipeline, followed by Hungary (224 GWh) and Norway (136 GWh). According to the NGO “Transport and Environment”, France ranks only fourth with 122 GWh. Taiwanese group ProLogium has just confirmed the design of a fourth plant in Dunkirk, where President Emmanuel Macron was present last week.

However, according to the public organization, 68% of these projects can be “reduced, delayed or interrupted”, particularly because of American competition supported by Inflationary Reduction Act (IRA) subsidies. This US government plan includes huge tax breaks for green industries and the energy transition to counter the rise of China.

“The essence of the IRA is to reduce electricity taxes to finance green electricity”, explains Tobias Gerke. For example, thanks to this law, hydrogen became much more affordable. Europe’s competitiveness is reduced. “We pay twice as much for electricity compared to China”– complains Tobias Gerke. “We must subsidize energy so as not to be left behind. The Americans understood this well with the IRA.”he adds.

An unrealistic goal?

For example, in December, lithium-ion batteries in the US were 24% more expensive than in China. They were in Europe up to 34% more expensive. Europe’s aim to produce all the batteries needed for its car industry on its own soil by 2030 seems unlikely, according to a researcher unrealistic at this stage.

Another major disadvantage is access to critical materials such as graphite, lithium, nickel, manganese and cobalt, the supply chain of which is largely controlled by China. In particular, China owns 75% of lithium processing and 50% of cobalt, and should maintain the lead in battery production for the next five years, according to BloombergNEF forecasts.

However, Europe has begun to respond with the Critical Raw Materials Act, which aims to establish strategic partnerships and a common procurement platform at the level of the European Union.

In addition, “Europe is slightly ahead of the United States in terms of adoption of electric vehicles“, says Gilles Norman, Vice President of ProLogium, in particular, Mr commitment to sell new cars with zero emissions from 2035thus giving a clear and precise vision of the direction in which industrialists should move.