E-Mobility Breakthrough: Europe Becomes Number One

Europe wants to produce battery cells en masse very soon. Berlin, Paris and Brussels have agreed on this. In concrete terms, German Economic Minister Peter Altmaier, his French counterpart Bruno Le Maire and EU Commission Vice President Maros Sefcovic are aiming to build battery cells for seven million electric cars per year by 2025. By 2030, the share of the global market is expected to increase to 30 percent. As a reminder: to date, the volume of cells manufactured industrially in Europe is very low.

Two cross-border funding programs have already been launched to expedite the matter. These so-called IPCEIs, Important Projects of Common European Interest, total 20€ billion in public and private funding. In Germany alone, this is expected to generate investments of 13€ billion. The fact that Europe is now stepping on the accelerator in terms of battery factories is due to the strong increase in demand for electric cars. In Germany, where electric cars have long had a niche existence, cars with electric motors now account for 20 percent of new registrations. Volkswagen already sold 230,000 fully electric cars worldwide last year despite only starting deliveries of the ID.3, the first original electric VW, in September. This year, Volkswagen is targeting the 800,000 all-electric car mark. That would mean the Germans would overtake Tesla as early as this year.

VW is splurging on battery factories

In view of these developments, Volkswagen now also wants to get massively involved in the production of battery cells. Prior to VW’s “Power Day” the company had only publicly stated its intentions to build two cell factories. Now, the Germans have upped the goals to six gigafactories with a targeted capacity of 240 GWh by 2030. By way of comparison, Tesla and Panasonic's Gigafactory in Nevada, which is currently the world's largest production facility for battery cells, has a capacity of around 35 GWh. The Americans also have ambitious plans with the factory currently being built on the outskirts of Berlin expected to have a capacity of up to 100 GWh.

Volkswagen's show of strength comes against the background of the Group's full commitment to electromobility. By 2030, 70 percent of the cars produced are to be fully electric. Until recently, the target was 35 percent. Porsche is even planning an electric quota of 80 percent by 2030. The other automakers are now following suit. Former BMW CEO, Harald Krüger, was still undecided about whether to favour cars with electric or combustion engines. His successor, Oliver Zipse, at the helm of the company for just under two years, has made electric cars the top priority at BMW. With this turnaround among European manufacturers, it is becoming clear that Europe will develop into the largest market for electric cars. All that remains to be decided is whether this will happen this year or next.

Blueprint China

The Chinese strategy is to either produce the battery raw materials themselves abroad or import them, refine and process them in the People's Republic and sell finished products - battery cells, for example. European politicians and company managers are now increasingly thinking along the lines of the entire value chain as evidenced by their intentions to support the building battery cell factories. However, some critical components of the value chain are still missing.

As it stands today, Europe will need around ten to twelve converters in just a few years' time to process lithium feedstock into battery-grade lithium carbonate or hydroxide. Rock Tech is one of the first companies planning to build such a converter in Germany. Europe must also secure battery raw materials to ensure supply. China, in particular, has repeatedly used raw materials such as rare earths as a political weapon. For Europe, deposits in politically stable countries - such as Canada, where Rock Tech's lithium resource is located - are the main candidates.

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