The French government sees a battery-powered future and is betting big on it with news that it will invest 700 million euros in the manufacturing of battery cells for electric vehicles over the next 5 years. News broke of the investment as part of a new plan crafted by French President Emmanuel Macron that was shared to the International Organization of Motor Vehicle Manufacturers in Paris.
He shared that the plan was a part of a joint effort between the French and German governments to build up critical battery cell production capacity in the automotive manufacturing heavy regions and serves as recognition that the future of the automotive industry is in electric vehicles. In parallel, the move indirectly supports new renewable development as battery-based stationary energy storage solutions underpin the necessary grid storage for the increased penetration of renewables, among other solutions.
Macron’s plan shared that the investment would support new battery cell factories in Germany and France, but with no specifics to support the statement about the capacity of each plant or chemistries that would be produced. Battery chemistries for the next 1-3 years will clearly be focused on Nickel-Manganese-Cobalt chemistries like NMC111 and NMC622, with solid state batteries, lithium sulfur, and other next generation chemistries having the potential to disrupt in the 3-5 year time frame.
The EV-centric plan also includes scope for supporting the growth of EVs with new investments in the construction of public EV charging stations and increased visibility of EV purchase incentives. These EV purchase incentives join subsidies in Germany, where the government has committed 1 billion euros in incentives up through 2022.
Battery cell manufacturing capacity continues to be one of the most interesting metrics in the renewables and the automotive industries as both converge on energy storage as the critical technology underpinning their evolution. At present, the majority of the world’s lithium ion cells are produced in Nevada by some small American startup called Tesla while established Chinese players like CATL and BYD compete with Korea’s Samsung and LG Chem to build new factories to supply the rest of the world’s automakers.
Competition is getting fierce as suppliers realize their value and automotive companies come to grips with the reality that there simply isn’t enough battery cell production capacity in the world for them to build the dreams they sold the world. Millions of EVs by 2021? Maybe total, but it’s going to be a fight for battery cell volume. By 2025, things should start to level out as battery cell production stabilizes, but this early investment from France and Germany speak to the fear that has been instilled in their automotive companies by existing battery cell suppliers.
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