The EU head of Energy Union, Maroš Šefčovič, has outlined the growing need for battery infrastructure in Europe with bold words. He also sees the need for a coordinated private and public effort in bringing about a change in Europe.
Šefčovič expects that more than ten Gigafactories à la Tesla will be needed in the EU to supply the demand for batteries 2025, an estimated 200 GWh. He has asked car manufacturers and suppliers to put more effort into setting up cell production in Europe, and foresees a market for energy worth 250 billion euros.
On February 23 the EU commission will recommend a possible strategy for the start of a European battery cooperation. In early May an actionable plan is set to follow, which will also decide which features will be financed by the EU. For the next period, following 2021, there is already higher investment earmarked for research and development.
According to the report, the offer will also be interesting for companies outside of Europe. Several battery producers from South Korea, China and the USA have announced their interest in setting up a battery production venture on the continent. They will likely be in a position to benefit from EU subsidies as well.
Several German supply managers and battery producers have already noted that current battery production is in a select few hands. Some battery providers have allegedly abused their position by interrupting existing contracts to sell batteries for a quick payoff, particularly if the company is a smaller one.
On the European side, response to the potentially looming battery shortage has been slow. As of last October, several leading figures from politics, academics and commercial ventures were gathered for a European battery cooperation. The result of the meeting was a battery symposium in Brussels, which was spearheaded by Šefčovič. They managed to agree to a plan to set up a supply chain for European battery production. TerraE Holding is hoping to receive considerable subsidies from the EU government. Overall, the EU plans to spend up to 2.2 billion euros.
Already in January skeptical voices started criticising the plan, as multiple heads of industry reportedly doubted the value of large investments into battery production infrastructure.
It remains to be seen what the EU plans once it releases its strategy draft. Whether a large and concerted effort is to come together, depends on the industry.
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