A recent Deloitte study reveals that European companies in the automotive and battery sectors are missing out on billions in revenue due to Asian dominance in the battery value chain. Specifically, European battery companies could lose out on profits totalling €10.5 billion over the next four years if they do not produce the battery cells required for EVs manufactured in Europe themselves. According to Deloitte: when accounting for imported precursors, production facilities, and skilled workers dispatched from Asia – on which the European battery industry relies – the lost value added could even reach €100 to €150 billion by 2030.
Some European corporations have considered large-scale investments in battery cell production in recent years but have often hesitated. For instance, Bosch CEO Stefan Hartung admitted in January in an interview with Zeit: “The risk was simply too great: to play a relevant role, we would have had to invest double-digit billions. And we have seen how some promising European projects have unfortunately failed spectacularly.” This likely refers, among others, to the bankruptcy of the Swedish company Northvolt, in which VW and BMW had placed their bets.
Meanwhile, the European Union has recognised the importance of battery cell production for traction batteries in European-made EVs and has just published a call for funding under its ‘Battery Booster‘ initiative. This programme aims to provide interest-free loans to support the scaling-up of cell factories. The projects most likely to benefit are those by ACC (a joint venture by Stellantis, Mercedes-Benz, and TotalEnergies), Verkor (backed by Renault, among others), and PowerCo (part of the VW Group). If these cell factories succeed in ramping up production, a battery cell industry under European ownership could finally emerge.
