The investments are gigantic. To catch up with China in terms of electrification of the automobile industry, Europe and the United States will spend hundreds of billions of euros. Most of it will go into the construction of gigafactories, factories giant in size, but above all capable of producing gigawatts of electricity storage by battery. For the year 2022 alone, 131 billion dollars (120 billion euros) have been invested, according to a study by the energy firm Benchmark, published in September.
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The race is on. In 2030, there will be 38 factories (compared to 17 currently) in the United States and Canada, which massively subsidize these installations. They require manufacturers to produce batteries locally to benefit from aid on the sale of electric models. In Europe, we would go from around fifteen factories to 36. The new establishments show volumes significantly higher than the old ones.
Despite this rapid pace, we already know who won the race: the Chinese tortoise, who left well before the others. In China, there are 141 gigafactories, and there will be 291 in 2030. The domestic market for cars is enormous. But it will not be enough to saturate all these capacities. There will be some left for export. In 2030, if all projects are completed, 9,000 gigawatts of batteries will be produced for an industry that would consume around 5,000, according to Benchmark.
Overcapacity is already looming. This allows Luca de Meo, the general director of Renault, to predict, when he presented Ampere, its subsidiary dedicated to electric vehicles, on Wednesday November 15, that the cost of cars will fall. It also justifies Renault’s choice not to have its own battery manufacturing, but to sign partnerships with suppliers: the South Korean LG, which has equipped the Zoe since 2012, the Chinese Envision, a long-time partner of Nissan, or the French start-up Verkor, of which he became a minority shareholder.
They are the ones who will take the risks, supported, for Envision and Verkor, by France, the European Union and the Hauts-de-France region. Volkswagen made a completely different choice, deciding to invest, by 2030, more than 20 billion euros in its subsidiary PowerCo to develop and produce its own batteries internally. The German group does not want to be dependent on its suppliers for a component which today represents 40% of the value of the car. Stellantis’ strategy is halfway there: the group is acquiring internal capacity through Automotive Cells Company, its subsidiary with TotalEnergies and Mercedes, but has also concluded many partnerships. Furthermore, on November 21, the manufacturer signed an agreement with the Chinese CATL to supply the European market with LFP batteries, a cheaper technology mastered by manufacturers in the Middle Kingdom.
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