Countries are waking up to the serious threats posed on over-reliance on Chineese goods and its ramifications on their supply chains.
In a significant development French President Emmanuel Macron disclosed, France will invest $790 million (700 million euros) over the next five years to boost the European electric car battery industry and reduce its carmakers’ reliance on dominant Asian rivals.
Macron unveiled his strategy to help the French car industry fend off competition on electric vehicles (EV) and autonomous vehicles from other countries, in a speech he delivered to the Paris-based International Organisation of Motor Vehicle Manufacturers.
The development comes in the wake of Germany unveiling its own plan, in November 2018, in which it provisioned 1 billion euros to support battery cell production to reduce dependence on Asian suppliers and shore up jobs at home that may be at risk from the shift away from combustion engines.
Macron stated, two factories would be built – one in France and the other in Germany, under a French-German initiative.
Both developments come at a time when countries across the globe are waking up to the threats posed on reliance on Chinese suppliers.
“As the president of France, I cannot be happy with a situation where 100 percent of the batteries of my electric vehicles are produced in Asia,” said Macron. “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 percent reliant on non-Europeans. So that’s why according to me on batteries we need a European wake-up call.”
Although a few carmakers assemble battery packs in Europe, the bloc has no significant production of their constituent cells which is currently being dominated by a handful of firms including China’s CATL, Samsung and LG Chem.
“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,” said a French official.
In March 2018, Peugeot-maker PSA gave whole hearted support behind efforts to create a European manufacturer of electric car batteries. The move was also supported by Renault which sources electric-car batteries from LG Chem.
“We’re noticing a realization among carmakers that tomorrow’s competition will require a local battery industry,” said a French official.
Macron’s plan also includes facilitating the construction of electric vehicle charging points, giving more visibility to carmakers about electric vehicle bonuses for consumers and increasing the government’s EV purchasing targets.