Why European battery companies risk not surviving
At least half of the battery factory investments planned in Europe up to 2030 are at risk of underutilization. Giraldo's analysis taken from the Out newsletter
European electric car (EV) battery manufacturers are experiencing a dramatic confrontation between dreams and reality. Suffocated by stagnant demand, lack of economies of scale and technological inferiority compared to Asian competitors, led by the Chinese.
An accurate analysis appearing in the Financial Times painted a gloomy picture for an industry that should have represented the fundamental pillar to allow European car manufacturers a minimum of upstream vertical integration.
But unfortunately the "horse doesn't drink". EV sales in Europe show a timid increase of 2.4% in the first five months of 2024, compared to the same period in 2023. In May even -11%. And the forecast for 2030 was cut by 15% in a matter of months.
The consequence is that at least 50% of the investments in "Gigafactories" planned in Europe until 2030 are at risk of underutilization, compared to 29% of Chinese producers, who however operate on an installed production capacity that is almost triple.
A difference in production scale which inevitably leads to lower costs to the advantage of the Chinese.
If we add to this that in Asia they have focused on a technology (LFP) that costs less than the one prevalent in Europe (based on nickel and cobalt), the European industry appears right at the corner and investors are starting to reconsider , postponing or canceling planned investments. While European EV manufacturers already seem to prefer Asian batteries.
The (hefty) bill is arriving for a senseless flight forward based on the "green" ideology that has irreparably damaged an industry that was once the pride of our continent.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/crisi-produttori-batterie-europa/ on Sat, 13 Jul 2024 05:00:37 +0000.