Electric cars: Global supply shortages discussed by expert
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A new report has found that Europe could end its reliance on China for electric car batteries by the end of the decade. Figures show that the EU is currently “on track” to produce enough batteries to meet its own demand. Countries in Europe and around the world are looking to phase out petrol and diesel cars, as part of the global push towards net zero. As a result, the global demand for EVs is steadily rising. However, China is a major player in the electric vehicles industry, and is particularly dominant when it comes to refining and processing battery metals.
This has caused experts to raise concerns that without proper investment in domestic EV supply chains, both the EU and the UK could risk becoming too reliant on China, just like the continent’s heavy dependence on Russian energy.
Now, a new report by the renewable energy campaign group Transport and Environment found that the EU is on track to produce enough batteries to neet its demands by 2027.
But they warned that substantial investment would be needed to keep pace with US President Joe Biden’s $369bn (£298bn) Inflation Reduction Act, which offered massive subsidies to green businesses.
The authors wrote the US policies “might make companies re-prioritise the current announcements in Europe towards the US”. For EVs and batteries, the risk is that the projects – and therefore Europe’s ambition – get delayed.
“In just a few months since the launch of the US IRA, investments into battery factories, new mines and electric vehicles have mushroomed in North America.
“This is in response to the requirement that 40% of battery metals need to come from the US and half of all battery components made in North America from 2024 for the full EV tax credit to apply.”
Currently, Europe has no lithium refineries, with about 90 percent of the world processing of metal critical to electric batteries taking place in China and East Asia.
However with Germany and France currently building refinery projects, Europe’s electric vehicle domestic prospects are expected to receive a massive boost.
Julia Poliscanova, senior director for vehicles and e-mobility at T&E, said: “Today half of the lithium-ion battery cells used in the EU are already made there.
“But the Inflation Reduction Act has changed the rules of the game, and Europe needs to put more money on the table or risk losing planned battery factories and jobs to America.”
While the EU’s electric vehicle industry is racing ahead, the UK is facing a flat tyre. Last week, Britishvolt, the battery startup that was building a £3.8billion “gigafactory” near Blyth, Northumberland, collapsed into administration.
The collapse, regarded as a major blow the UK’s EV ambitions, was not surprising, according to Aston Martin’s former head honcho. Dr Andy Palmer, who also used to run Nissan, says he has long warned over the UK’s lack of a proper strategy to help grow the EV sector despite its intentions to build at least six battery-making plants on British soil.
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In a comment piece for City AM Dr Palmer, who is now the CEO of Switch Mobility and Chair of InoBat, also argued that Britishvolt’s collapse could signal the start of the industry’s downfall.
While he admitted that British consumers would still buy electric vehicles, although not those made in the UK, Dr Palmer noted that the UK desperately needs to slash its dependence on foreign countries for battery production.
While other firms have been tipped to set up UK-based battery-making sites following Britishvolt’s collapse, Dr Palmer is deeply concerned that the firm’s collapse is an indicator that Britain “does not have the optimum conditions for a battery manufacturer to succeed”.
He claimed that various Governments have repeatedly failed to clock on. Dr Palmer wrote: “Whether it’s Imperial College London working on developing new battery technologies that could significantly improve the range and performance of EVs, or Coventry and Universities helping to drive net-zero trade in rural, emerging markets through electric delivery trucks – we have the brainpower to succeed in this space.”
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