E-car shock

Europe’s plan to create its own Gigafactory might backfire

Speeding Compact Car
The EU might give the car industry the wrong kind of jolt. Source: Fotolia

European politicians want to kickstart local production of e-car batteries, but they might shoot themselves in the foot.

EU incentives, ranging from subsidies to cutting red tape, might end up boosting US and Asian battery cell producers instead of European firms. Several companies from America, China and South Korea signaled interest to authorities in Brussels to build up manufacturing in Europe, people familiar with the matter said.

Asian producers such as LG Chem, Samsung, Panasonic and BYD currently control almost 90 percent of the global battery market, which is seen as a threat for Europe’s car industry. Batteries are a crucial part of electric vehicles. If e-cars become a mass commodity, which analysts predict, the importance of European car suppliers could fall and jobs may be at risk. Volkswagen, Mercedes, BMW, Peugeot and Renault all want to make and sell more electric cars and they typically buy batteries made in Asia.

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