As EV sales are surging, Europe is trying to enhance its capacity to produce batteries domestically, instead of fully relying on Asian countries such as China, Japan, and South Korea, which are currently the major global manufacturers.
As of May 2021, 38 battery cell gigafactories are being built or planned in Europe and the UK, according to the latest report by the non-governmental organization Transport & Environment.
Out of the 38 projects, 17 have secured funding so far, estimated to be up to $30 billion between them. The amount consists of both private and public funding, including, for instance, Tesla’s gigafactory in Berlin, which received $1.4 billion in German federal and state support.
Ten other projects have secured partial financing and support, making up at least $16.8 billion in potential investments. These include numerous national projects, key to Europe’s battery autonomy, notably Verkor in France, Britishvolt in the UK, Italvolt in Italy, Basquevolt-Nabatt in Spain, and Freyr in Norway.
In addition, 11 more gigafactories have recently been announced, but still lack firm commitments regarding location, planned capacity, and investment.
What’s the good news? If all 38 gigafactories come through, 462 GWh worth of battery cells could be produced in 2025 and 1,144 GWh in 2030 – that’s 13 times higher the current European supply of 87 GWh in 2021. According to Transport & Environment’s analysis, this would give Europe one fifth of global cell production by 2025, rendering it second only to China .
But while the estimated total 1100 GWh output of the factories would enable Europe to power over 90% of all new vehicle sales by 2030, a slowdown in electric vehicle sales would seriously jeopardize its chance to become a global leader.
This means that there will need to be a continuous increase in CO2 emission targets to incentivize car makers to escalate the manufacture and sales of EVs by the same year.
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