Boosting the European battery industry

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One of the main issues concerning electric vehicles (EVs), is their higher initial purchase price as compared to their internal combustion engine (ICE) counterparts. Bringing their costs down will be largely determined by the scale of investments to improve performance and cost of EV batteries.

Bellona has repeatedly stressed the importance of increased levels of EU funding to be made available to stimulate locally manufactured batteries. While Europe has an existing battery production base of battery technologies it is facing strong competition from its Asian counterparts, who have a clear dominance in the Li-ion battery and energy storage markets. Over the past five years, the growth of the energy storage market in China has outpaced that of the global market by six times, with a growth rate of 110%. Installed capacity of Li-ion battery captured 66% of the market share in the energy storage market.

Failure to catch up could cost EU industry its competitiveness and viability. A comprehensive EU strategy is therefore needed to provide guarantee for the long-term investment planning by battery manufacturers and the supply chain in Europe.

The end of the internal combustion engine is clear and approaching. In recognition of this, many European cities are planning bans on fossil cars, whereas China wants to impose a quota for the production of EVs. The EU legislation setting CO2 fuel economy standards for new cars and vans is currently under revision. It is likely that failure to comply with the new targets (which in turn will necessitate significant EV sales) will translate into billions in fines for car makers.

One in seven jobs in Germany currently depends directly or indirectly on automobile manufacturers and their suppliers. The degree to which these jobs will be retained or replaced with new ones in electric mobility depends on how effectively the companies involved will cope with the transition. Failure to cope will ultimately mean gradual decline.

European battery manufacturers have and will continuously create added value for European jobs, know-how and research & development. They are active in all market segments to various degrees, supplying batteries to European and international customers and directly employing more than 30.000 people[1]

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In the developing world, on the other hand, energy storage could help drive development by providing access to electricity and fostering the integration of renewable energies.

In the energy sector, batteries store renewable energy and discharge it when it is needed at every level of the grid, enabling the growth of renewables in the energy mix and offering important stability services.

Bellona believes that energy storage and EV batteries should be at the core of our transition to a sustainable electric transport system. The electric car revolution will be followed by an electric supply revolution, where the development of EVs will enable the decrease in the price of battery storage while simultaneously increasing supply from renewable sources.

 

[1] http://eurobat.org/sites/default/files/170224_eurobat_battery_strategy_for_europe.pdf

Bellona Europa

europe@bellona.org