EU 'has 18 months' to catch China in EV race
Region faces serious battery capacity shortfall by 2030, report finds
The EU risks falling permanently behind China in the race to develop a leading EV supply chain if it does not take decisive action immediately, according to a new report by French research institution Ecole Polytechnique.
While the report praises European automakers' manufacturing capabilities, it warns that the legislative environment has not allowed the battery industry to flourish in the bloc. This echoes the findings of thinktank Transport and Energy in a study last year.
Current installed battery production in Europe is not sufficient to meet expected demand levels for 2030, let alone the 2035 ICE-vehicle phase out plan, the French report argues.
It finds that installed cathode and anode production capacity will only meet 64pc and 18pc of demand respectively in 2030.
The shortfall is a result both of the EU's refusal to implement protectionist measures and its failure to secure the necessary supply of raw materials.
Neither the Critical Raw Materials Act's (CRMA) low target of 40pc material processing in Europe, nor the lack of financial incentives, encourage the localisation of production capacity," says the report.
Projected raw materials extraction capacity in both Europe and the US is insufficient to meet demand in these regions by 2030.
Both regions will either need to sign free trade agreements to secure the necessary supplies, or else develop alternative technologies that will make them less dependent on refined raw materials, Ecole Polytechnique warns.
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The upstream shortfalls in Europe's EV supply chains leads Ecole Polytechnique to warn of total Chinese dominance in the EV market if the EU's legislative environment is not improved.
The report sets an eighteen month deadline for "decisive action" which will allow the European EV industry and supply chains to catch up with China.
The CRMA, as well as further legislation on raw material rules of origin (RoO), are still being finalised by the European Council.
Under current RoO rules, which last year were extended until the end of 2027, at least 55pc of the value of an EV needs to be from the EU or UK to qualify for zero tariffs. In addition, 65pc of a battery's value and 70pc of the value of battery packs must be sourced from the EU or UK.
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