EU battery factories risk being underused, warns green group

Battery factories across Europe risk standing empty until the end of the decade unless rules forcing carmakers to sell electric vehicles are tightened, according to environmental campaigners.

Transport & Environment, which wants tougher CO2 rules to force higher sales of battery vehicles by 2025, said that only one-third of planned facilities would be needed in the middle of the decade under current projections.

It calculates that 462 Gigawatt hours (GWh) of battery facilities will be open in the EU and UK by 2025, but expects demand for only 174 GWh worth of electric vehicles that year.

This will leading to a delay in project investors recouping their money, and slow the creation of new green jobs across the region, it said.

While Europe has been slower than Asia to build battery centres, the region has plans for 38 factories, worth about €40bn, T&E states, including six Volkswagen facilities and some dedicated country plants such as BritishVolt in the UK.

Carmakers ramped up sales of electric models to meet tough new emissions rules in 2020 and this year, with a significant step change in CO2 regulation due in 2030 that will increase electric uptake further.

However, electric-car sales are already rising organically every year, as falling battery prices and a wider range of models persuade more consumers to switch to the technology.

The next generation of EU-wide engine emission rules, called Euro 7, are due to come into force in 2025 and are expected to provide a further fillip to electric sales by making traditional engines more expensive.

But the terms of the regulation are not finalised, and T&E wants stricter dedicated CO2 rules to boost sales of battery models in the middle of the decade.

“The battery industry is successfully responding to Europe’s electric-vehicle ambitions, yet EU policymakers are failing to provide regulatory certainty and guarantee the adequate market for electric vehicles,” said Julia Poliscanova, senior T & E director.

“The EU and UK must raise CO2 standards throughout the decade to avoid wasting billions of investments and derailing the battery boom.”

Carmakers are expecting a significant rise in electric-vehicle sales in the coming years, with many in the industry expecting a spike in the second half of the decade as falling battery prices make electric cars cheaper to buy than petrol models.

Some markets, such as the UK, will phase out the sale of non-hybrid petrol models completely by 2030, while Ford and Volvo have both pledged to sell only electric passenger cars by the end of the decade across the continent.

T&E expects demand by 2030 of 462 GWh of batteries for electric cars, exceeding the region’s planned capacity.

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