EU could produce enough batteries for EV industry by 2025: Sefcovic

London — The European Union could produce enough battery cells to meet the needs of its electric vehicle (EV) industry by 2025, European Commission vice president Maros Sefcovic said Nov. 24 at the virtual European Conference on Batteries.

Sefcovic told the conference that he was confident of this and there was the possibility that the EU would even be able to build its export capacity.

"I am aware that this is a big ask. If we do manage to achieve this, it will in large part be thanks to the Battery Alliance; a truly collaborative effort requiring the full commitment of all involved," he said.

The European Battery Alliance (EBA) was established in 2017 to develop a globally competitive, innovative and sustainable European battery value chain, which Sefcovic said many people had doubted was possible.

"The last three years, however, have shown us that it is not only possible, but fast becoming reality. We still have a long way to go, but I am convinced we can achieve our goal of strategic autonomy in this critical industrial sector," Sefcovic said.

Sefcovic said the EBA attracted around Eur60 billion ($71.3 billion) of investment across the value chain in 2019 and Eur25 billion so far in 2020, which were three times and twice the amount invested in China's value chain respectively.

"A European battery ecosystem...[is] a crucial part of future-proofing our economy as a whole, especially the automotive sector. With more than 500 industrial actors, the alliance has become a resounding success in just three years, turning Europe into a global battery hotspot," he added.

Sefcovic said some 15 new battery cell plants, or gigafactories, were being built across Europe, including in Italy, France, Germany, Hungary, Poland, Slovakia and Sweden, which were expected to provide enough cells to power at least 6 million EVs by 2025.

He said the scale of investment to achieve this was immense, but substantial funding had already been invested into large-scale industrial projects and the Eur750 billion NextGenerationEU recovery plan also had investment earmarked to accelerate the green and digital transitions.

He said the recovery plan's investment in batteries would help drive the EU's recovery from the COVID-19 pandemic, as well as its long-term resilience.

Sefcovic added that investment was not only needed for battery cell production but also for the whole value chain, which he said was expected to have a market value of Eur250 billion by 2025.

He said investment was needed for the extraction and processing of critical raw materials, for the manufacturing of materials necessary for battery cell production such as cathodes, anodes, and separators, and for end-of-life treatment and recycling facilities.

"Such investment would help bring equilibrium between domestic and external supplies in battery cell production," he said.

Future projects

Going forward, Sefcovic said the EBA would focus on finalizing its upcoming second Important Project of Common European Interest (IPCEI), put forward a new future-proof regulatory framework on batteries, strengthen the resilience of our critical materials value chains, and ensure adequate levels of research funding.

Sefcovic said the first IPCEI, which was approved in December 2019, led by France and involving seven member states and 17 companies, had represented up to Eur3.2 billion in grants and leveraged a further Eur5 billion in private investment.

He said the second IPCEI would be bigger, led by Germany and involving 12 member states and almost 50 companies covering the entire battery value chain.

The focus of the second IPCEI will be on innovation and sustainability to generate economic growth through spill-over effects and contribute to the EU's strategic priorities, notably the Green Deal.

Sefcovic noted that the EU needed to reduce emissions in its transport sector by 90% to meet its 2050 climate goals, but this could not be achieved by simply replacing internal combustion vehicles with EVs.

"Electric cars still cause emissions: in the production phase and through the generation of electricity to power them. The production of batteries alone accounts for nearly half of these emissions; steel manufacturing is another significant culprit. So we will foster projects in Europe geared towards developing green batteries and cost-competitive green steel," Sefcovic said.

On the industrial research side, Sefcovic said the EC would step up investment into the future Horizon Europe program, which had yet to be finalized, but would have a significant portion dedicated to a new generation of sustainable, high-performing batteries.

He added that the EU should also use its trade and customs instruments to promote local sourcing, as well as swiftly adopt a new regulatory framework on batteries before some investments cumulated in 2023 or 2024.

He said the EC would be bringing forward a proposal in December, which would ensure that only the greenest and safest batteries made it on to the EU market.

"Our proposal will provide for a comprehensive framework that is ambitious on transparent and ethical sourcing of raw materials, carbon footprint of batteries, and recycling. And, as the first of its kind in the world, it will de facto set a global standard in one of the fastest growing and most critical global markets," Sefcovic said.

He also mentioned the newly establish European Raw Materials Alliance, pointing out that to strengthen the security of raw materials supply chains, while ensuring sustainability and social responsibility standards, the EU needed to build strategic partnerships, as well as increase domestic sourcing, support innovation for alternatives, and mainstream circularity.

"With the first investment cases already emerging across 14 member states, this will be one of our top priorities in the coming months and years," Sefcovic said.