By Philip Blankenship
BRUSSELS, March 2 (Reuters) – Scaling production in Europe could reduce the cost gap between EU-made batteries and those coming from China to around 30% from 90%, transport and environment campaign group T&E said in a report on Monday, and called on the EU to support the sector in Europe’s plan.
The EU executive will propose its “Industrial Acceleration Act” on Wednesday, with requirements to prioritize locally produced products when public money is used. It is designed to cover “key strategic sectors” including batteries, solar and wind energy, hydrogen production, nuclear power and electric vehicles.
Some automakers have said that local content requirements would make batteries prohibitively expensive and undermine the competitiveness of their models.
The T&E report says that improved production efficiency, particularly through lower scrap prices as well as labor intelligence and automation, could reduce the cost gap to $14 per kWh in 2030 from a potential $41 per kWh.
That would equate to an average gap of 500 euros ($590) for electric vehicles, which would be even smaller with public incentives or could be treated as an insurance premium against the kinds of export restrictions China has already put in place on key minerals and rare earths.
“Europe needs the domestic battery industry as an insurance policy against weaponizing its supply chain. Local content requirements are the only policy on the table to avoid another North Volt. The cost of EU-made rules is a governance premium that is worth paying,” said Julia Poliskanova, T&E-Mobility’s senior supply director.
The cost gap will only decrease if EU local content requirements allow companies like ACC, Powerco, Verkor to increase production.
T&E said the European-made plan should make clear that public support schemes clearly include EV tax rebates for EV owners as well as employees and workers in corporate car schemes.
($1 = 0.8464 Euro)
(Reporting by Philip Blankenship; Editing by Hugh Lawson)
