France to invest €700M in battery cell production
French President Emmanuel Macron has announced that his government will invest 700 million euros in the production of battery cells for electric cars over the next five years. The plan is part of a Franco-German project to establish cell production in Europe.
Macron made the announcement while giving a speech to the Paris-based International Organisation of Motor Vehicle Manufacturers. In concrete terms, the French President said that a battery cell factory each in France and Germany is planned, but did not give any details. Macron’s plan also includes giving more visibility to carmakers about electric vehicle bonuses for consumers and increasing the government’s EV purchasing targets, as well as facilitating the construction of electric vehicle charging points.
As reported, the governments of Germany and France agreed in December on the elaboration of a strategic approach for the future production of battery cells in Europe. The German government already pledged one billion euros in subsidies for this until 2022, the amount of France’s participation was still unclear at that time.
While France has specified their intention now and more concrete plans have emerged from Germany, the statement in December included a call to other players of other EU member states. Interested consortia may submit their projects for classification as an ‘Important Project of Common European Interest’ (IPCEI) in the first half of 2019.
As Macron mentioned in his speech, as is already well known in the industry, European carmakers only assemble battery packs but do not yet have any significant production plants for their constituent cells. As European vehicle manufacturers are acutely aware, battery production is currently dominated by a handful of firms including China’s CATL, Korean rivals LG Chem and Samsung and Japanese battery giant, Panasonic. This also means that Asian firms have strategic access to supply chains and raw materials.
The French President said, that “in terms of sovereignty and independence, I think it’s not good in the long run for our industry and the European industry to be 100 per cent reliant on non-Europeans”.
This was spelt out in clear terms by a French official, as Reuters reported, who said that “China has a very aggressive strategy to eventually dominate the electric vehicle universe by starting from electric batteries all the way up the value chain”. Europe is becoming increasingly aware of the difficulties posed by relying on Chinese suppliers.
Additional reporting by Nora Manthey.