European Car Makers May Be Too Late To Catch Up With China In Electric Cars

The race to bring electric cars into the mainstream market is in full swing, but despite their best efforts, Europe’s top car companies may not be able to catch up with China after all.

China is seen as the leader in EV battery technologies, which is vital for the future of the auto industry as a whole.

Analysts predict that the Asian country will remain in the top spot in the years to come, CNN reports.

“Europe might well see its car makers massively moving production to China in the future,” said Simone Tagliapietra, an energy analyst at the Milan-based Fondazione Eni Enrico Mattei think tank. “This is a huge risk” for the European automotive industry, he added.

China is the largest electric car market in the world, accounting for around half of global sales, but is also where almost two-thirds of the world’s manufacturing capacity for lithium-ion batteries resides. These two factors alone play a huge part for car companies to build their electric cars there, not to mention that they avoid the heavy tariffs on imported vehicles as well.

“It just makes sense to produce electric vehicles where batteries are also produced,” Tagliapietra said.

Europe, on the other hand, is estimated to have just 1 percent of the lithium-ion battery production market. “There’s a few smaller European facilities, but nothing significant,” said Gavin Montgomery, Wood Mackenzie’s research director of global metals markets in London.

But even Europe’s major battery companies are picking China to invest in, rather at home; Netherlands-based Lithium Werks already has two factories in China and prepares for a third one, a $1.8 billion investment that will be completed with a local partner outside Shanghai.

Kees Koolen, Lithium Werks’ Chairman, said that the company was investing in China because of its better infrastructure and easier access to permits needed for a factory. “In Europe there’s a lot of hassle and a lot of procedures to follow. It takes a long time,” Koolen said.

The European Commission tries to change that with a new strategy that includes encouraging companies to invest more in battery technologies, including offering more funding to them.

“The lack of European cell manufacturing base puts the EU at a competitive disadvantage – it jeopardizes the position of EU’s industry because of security of supply chain issues and increases costs due to transportation, time delays, weaker quality control or limitation on the design”, said the Commission in a press release.

Europe’s plans however could come across other issues. China has been locking down supplies of the key resources required for battery production, like lithium and cobalt, in the past few years. “It’s already too late” for European companies to establish themselves as large-scale manufacturers of lithium-ion batteries, said Viktor Irle, co-founder of Swedish research firm EV-Volumes. “That train has already departed.”

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  • Dr Bjorn K. Von Strangefingger

    The Chinese will euthanize Tesla in short order.

    • Callanish

      Tesla already has ties with China in manufacturing the model 3 and the future model Y. Their demise is just wishful thinking.

      https//www.cnbc.com/2018/10/17/tesla-buys-new-plot-for-its-first-china-factory.html

      • Dr Bjorn K. Von Strangefingger

        I disagree.

        • Callanish

          Everyone’s entitled to that.

    • THE ARTICLE IS ABOUT EUROPEAN MAKERS. IRONIC GIVEN ALL THE “TESLA FIGHTER” BRAVADO.

  • Richard Alexander

    Ludicrous. Reverse engineering.
    Buy product. Take it apart. Learn from it.

    I love how people project trends infinitely. Show me the 5000 ft tall trees.
    No one ever looks at the underlying drivers.
    Why is there so much investment in China?
    I dunno, maybe the largest credit bubble in the history of mankind?

    • D3X

      “Learn from it”, you mean copy it.

      “Why is there so much investment in China?” I think we all know; cheap labor, no human rights, no unions, no intellectual property protection, no environmental restrictions – It’s a capitalism haven.

      • Richard Alexander

        Take a closer look at what is really happening in China….major cracks forming in the facade….

  • MarkoS

    In China maybe, who cares. I will never buy a Chinese automobile.

    • D3X

      But you’re fine buying one that has every part made in China but assembled somewhere else. Great logic!

      • Ryan50

        You gotta do the best you can.

  • Ryan50

    Never even knew China had electric vehicles. I knew they had hybrids, but not full electric

    • Astonman

      they have been pumping them out because of the mandate to be more environmentally clean. On top of that, they don’t have vast internal resource for oil so they don’t want to be tied to oil and its politics. They do have huge resources to make batteries as the article said and that’s what they’re going to do.

  • EyalN

    Western car companies are history if governments are not going to block Chinese import.
    China is not a democracy, they don’t believe in fare trade.

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