Industry opposes EU Battery Alliance’s scope

The plan for a Europe-wide battery alliance is due next month. EU vice president Maroš Šefčovič is facing opposition from the industry though as executives doubt their investment in a European Gigafactory would pay off.

Instead of the wanted Gigafactory, Europe may only see construction of a Nanofactory. Signals from the industry so far, put the investment volume within the low three-digit million realm rather than the projected 2.5 billion euros. However, the investment may be expanded.

The EU had initially announced plans for a joint cell production in Europe at the battery summit in Brussels last year. EU vice president Šefčovič is ready to invest tax money but must also convince business leaders to invest in his EU Battery Alliance until February 2018.

His plan is ambitious and has been dubbed the “Battery Airbus” among Belgian bureaucrats already. It has not helped though to unite carmakers while suppliers such as Bosch and BASF have shown openness to the idea.

The automotive industry however remains sceptical regarding their return on investment. Their calculations put EV sales at no more than 2 percent of total sales for at least another decade in the Western world.
Growth in China is fuelled by batteries from local productions and Tesla recently thought aloud about setting up a second Gigafactory in the People’s Republic.

So it looks as if the big plan that was inspired by Tesla will likely be downsized. Millions in the three digit realm may still be paid and investment could be expanded in the future.

The EU may bear a third of the cost to try set up a cell production in Europe. The Horizon 2020 programme is one option and more public funding could be added if the battery project will be classified as IPCEI, a status reserved for overarching joint efforts. It had propelled Airbus to become Boeing’s competitor back then. Yet, to match the efforts Tesla and Panasonic or the multinationals from Korea have undertaken, will require more than a few hundred million euros.

There are regional initiatives though with Terra E and the Fab4Lib consortium looking into a German Gigafactory (we reported). Their approach is modular and has kicked off with 19 partners today.

stuttgarter-nachrichten.de (in German)