Can Europe Compete in Battery Production? Expert: Collaboration with Skilled Asians Key for Success
Asian expertise crucial in tackling regional challenges: Expert Insight
In the wake of Swedish electric vehicle battery startup Northvolt's financial troubles, battery guru Martin Winter is urging Europe not to hand over the battery industry to Chinese and Asian manufacturers. "Batteries are the acid test for whether we want to continue investing in future technology or not," Winter told Capital. "Europe needs its own cell production and it must succeed in producing large volumes."
Winter, head of the battery research center MEET at Münster University, has long advocated for boosting German battery cell expertise. According to Winter, Europe's reliance on Asian manufacturers over the long term would not result in the technological independence that the continent seeks. "At the outset, we should definitely seek the help of skilled professionals who have experience in the Asian industry and have established cell production," he said. "Without them, it will initially be a difficult road."
Will Europe Miss the Boat on Electric Vehicles?
Last week, Northvolt announced bankruptcy. Once a rising star, Northvolt raised billions of dollars in investor funds and gained support from the EU, German government, and automakers as a symbol of European battery competence. One of Northvolt's largest investors is the German Volkswagen Group. The collapsed battery startup left only a few hopes for European cell production - hopes that now rest with car manufacturers' subsidiaries. Volkswagen is building its own battery factory in Salzgitter and another in Valencia, as is the ACC consortium, a subsidiary of Stellantis, Mercedes, and TotalEnergies, with uncertain plans in Germany and Italy.
"Cell manufacturers closely linked to automakers certainly have a chance because they produce for large volumes and have steady customers," said Winter. "But they face intense pressure from their parent companies to purchase cells from Asian suppliers if they can't keep up in quality and price."
Navigating the Challenges of Cell Production
"In cell production, European manufacturers have very small manufacturing tolerances," explained Winter.守 secrecy in the initial phase of setting up factories, these startups often fail to publish their scrap rates, but data show that these rates can reach 60 or 70 percent in the beginning. "The lack of experience is evident in Europe in this manufacturing area," Winter said. "Reaching acceptable scrap rates requires a lot of hard work, time, and money."
The Right Approach for European Cell Production
"Cell producers, such as PowerCo and ACC, must prepare themselves for setbacks," Winter cautioned. "Cell manufacturing is a challenging endeavor, with low profit margins in the early stages. Three or even five years of delays would still be a success."
Bridging the Gap with Skilled Asians
"Europe needs to collaborate with Asian experts, particularly those with experience in large-scale battery production," Winter emphasized. "This will be crucial for the success of European battery manufacturers." In fact, UK-based startup Volklec partnered with Far East Battery to leverage licensed Chinese technology. Chinese companies are also investing in European battery projects, supplying European manufacturers with locally produced batteries, and sharing their expertise with European startups.
This text was first published on Capital.de.
Background: Strategies & Collaboration for Competitive European Battery Production
The European Union has several strategies to create a competitive battery production industry:
- Nearshoring and Localization: By relocating production closer to the end market, the automotive sector aims to improve supply chain resilience and reduce costs. This strategy mitigates logistical risks and environmental impacts associated with long-distance transportation.
- European Battery Alliance (EBA): Launched in 2017, the EBA facilitates collaboration with stakeholders to develop a sustainable and competitive battery manufacturing value chain. It aims to ensure that Europe benefits from technological advancements in the EV sector.
- Research and Development Investments: Projects such as the HoWaLIB initiative work to innovate manufacturing processes for lithium-ion batteries, improving performance while conserving resources.
- Support for EU Battery Manufacturers: To counter imported batteries with lower prices, the EU is considering direct support for its manufacturers and implementing European content requirements for battery cells and components to reduce dependency on imports and promote local production.
- In the light of the European Union's strategies towards competitive battery production, collaboration with Asian experts experienced in large-scale battery production, such as those at Far East Battery, could be crucial for the success of European battery manufacturers.
- Winter stresses that European cell producers like PowerCo and ACC should brace themselves for setbacks in the challenging endeavor of cell manufacturing, as three or even five years of delays could still be considered a success due to the industry's low profit margins in the early stages.
- As the continent aims to achieve technological independence and secure a lead in the electric vehicle sector, Europe's community policy should prioritize vocational training programs in battery production to ensure a skilled workforce capable of meeting the requirements of the cell manufacturing industry.
