EU Making A Late Entry: Could Support Of Battery Alliance Help?

  • Oct 18, 2018 AEDT
  • Team Kalkine
EU Making A Late Entry: Could Support Of Battery Alliance Help?

The battery alliance of the European Union or EU has plans to help the European automakers to increase their share. Let’s face it, the batteries are the primary contributor in the electricity and the global market participants expect that the future would more be electrically driven. The European auto industry provides employment to a large number of people and any obstacles in their growth prospects could impact the employment levels and hence, overall growth. The primary tailwinds for this industry are the experts in regard to powertrains as well as engines. Since the global economy tends to move towards the electric power in the future, not proper access to the innovation as well as battery production centers could take away the competitive edge.

As per the data from Bloomberg, approximately 80% of the global planned as well as battery production lies in the Asia region. The early birds into the industry were Korea as well as Japan. Of the total capacity, the United States makes up 15%, China 69% and finally, the EU makes up below 4%. Europe encounters challenges primarily because the region does not have an indigenous industry and thus this factor acts as the major headwind when it comes to the competition between advanced technologies. The manufacturers of these equipments are working towards reducing the charging times as well as the sizes of the batteries. However, aiding the economy in the battery is indeed a brave move as battery cell plants generally are in the need of huge investments and the returns on these are not much appealing. 

The European Commission stated that the projects which are focusing on developing advanced battery technology are allowed to avail the financial support which is being extended. The support represents a special programme’s part and would be under the state aid rules of the EU. However, the companies which would be availing the funding support needs to work with the 2-member states as well as they need to commit themselves to knowledge sharing.

In the name of the support, billions of euros would be given by the European Investment Bank as well as EU structural funds. However, the global market players are of the views that the help which has been extended by the EU would hardly serve the purpose primarily because of the strong Asian rivals. These rivals have the expertise as well as scale are coming up with the building capacity in the European region. However, to increase the probability of success, the European region could adopt a few more steps. Chinese started working in the electric car space by first working with public transport. Brussels needs to adopt the same methodology by pushing EU bus, taxi as well as truck fleets. This could help in the demand of the batteries. Apart from this, the EU might also provide the training to the number of battery engineers. If the European region falls back at this point in time, it could severely impact the overall economy and might increase the unemployment levels.

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