Northvolt lithium electric battery factory in Sweden
The European battery strategy is going down the drain, in what is “a primordial demonstration of arrogance and inflated rhetoric”.
The main gigafactory of batteries electricity companies in Europe, the Northvoltin northern Sweden, turn around.
The Swedish Government refused a bailout of what is the best-funded technology start-up in the European Union (EU), with 15 billion euros in subsidies, loans and capital.
But even the EU will have lost patience. Peter Carlssonchief executive of Northvolt (who has since resigned), said in a closed-door meeting, in the presence of a journalist from , that the EU had not offered his company “a single inch of flexibility” in terms of funding. This scenario made clear the EU limits in this matter.
“If this bureaucratic construction – directed by EU commissioners and which has a budget of 180 billion euros – cannot make Northvolt a success, what is the point?”, asked the journalist Ambrose Evans-Pritchard.
The European Commission does not have the powers of a real government to increase debt and taxes. THE EU budget is reduced and the Member States disagree on everything.
The Washington Center for International and Strategic Studies calculated that China spent $230 billion on state support to fuel its electric vehicle ecosystem. Brussels has neither the money nor the legal mandate to do the same.
The recent Draghi report, cited by the Telegraph, states that the EU needs joint debt issuance and a additional investment of 800 billion of euros per year to restore broader competitiveness. But that seems impossible.
One of the two: or the EU puts “real” money and reallocates a large part of GDP from social welfare to economic rearmament; or accepts an agreement with Chinato save part of your automotive industry at low cost.
The Telegraph writes that this scenario was provoked by a primordial demonstration of arrogance and inflated rhetoric. “Brussels can at least be proud of one thing: It has the most advanced battery regulations in the world. It is to be praised. Only the batteries are missing“.
Northvolt was a European dream
Northvolt’s project seemed to make perfect sense.
Sweden has one of the lower electricity prices of Europe, thanks to hydroelectric energy. The company was also the great hope of those who fought for a Muscular and totally sovereign industrial Europe.
Nine years after its founding, the company has achieved just 25% of its weekly production targets.
European catastrophe
At this moment, more than half of major EU battery projects are being postponed or canceled.
Europe continues to depend almost solely on China, South Korea and Japan with regard to the cathode and anode, the electrolytes and the polyolefin separators, which constitute the true value of lithium ion supply chain.
Currently, the companies that produce batteries in Europe are mostly Chinese or Korean. Tesla’s German factory in Grünheide relies on batteries from Chinese rival BYD.
Northvolt closed the cathode factory in September, transferring the supply contract to Samsung SDI of South Korea.
China much further ahead
Meanwhile, China has gained ground and is making serious bets on the future of technology with lithium iron phosphate (LFP) batteries – cheaper and safer.
These batteries do not require cobalt or nickel and can be used in the mass market at a much lower cost.
An April report from BloombergNEF points to a continued increase in LFP production in China by major suppliers like CATL, along with expanding production from manufacturers in other parts of the world, such as LG Energy Solution in South Korea.
