The EU Commission has approved another major European project for battery production for electric cars. She classified the 2.9 billion euro investment project by twelve EU countries under German leadership as a so-called project of common European interest, as the Commission Vice-President Margrethe Vestager (52) in charge of competition said in Brussels on Tuesday. This also paves the way for the promotion of Tesla in Germany free.
EU countries are allowed to support companies involved in such an “Important Project of Common European Interest” (IPCEI) financially to a greater extent than is otherwise permitted. “Innovative batteries are one of the keys to the success of the electric car”, but the investment risk is often too great for a single EU country or company, Vestager justified the Commission’s decision.
The Federal Ministry of Economics submitted the battery project for approval under state aid law in Brussels at the beginning of December. 42 companies from twelve EU countries are involved, including car companies such as BMW and Fiat Chrysler, medium-sized companies and start-ups. According to the ministry, eleven German companies are being funded. The US group Tesla is also involved, which is eligible for German funding because of its planned battery cell factory in Grünheide, Brandenburg. Last week it was said that Tesla could start preparations for a planned battery factory on the site of its car factory in Grünheide near Berlin.
“With the settlement of Tesla we will come a good deal closer to our goal of realizing around 30 percent of battery cell production in Europe worldwide,” said Federal Economics Minister Peter Altmaier (62, CDU). Tesla managed to make a “groundbreaking investment”. Brandenburg’s Prime Minister Dietmar Woidke (59, SPD) also expressed his satisfaction: “In addition to the production of electric cars and battery cells, research and development can also take place in Brandenburg.”
“The funds must now be available quickly so that companies can plan and manufacture,” said Hildegard Müller (53), President of the Association of the Automotive Industry.
The EU’s second billion-euro project for battery production
According to the commission, the project covers the entire value chain from raw material extraction through the development and production of battery cells to recycling. This value chain is “of strategic importance for the future of Europe, especially with a view to clean and low-emission mobility,” emphasized Vestager. Altmaier even spoke of a new economic “ecosystem” in Europe.
It is already the second billion euro project for a European battery cell production: Brussels had 2019 green light for an IPCEI with 3.2 billion euros of European state aid. Here, too, Germany was significantly alongside with public funds of up to 1.25 billion euros France involved. One of the largest recipients of the subsidies from the first project is the French PSA group, which has now merged with Fiat Chrysler to form Stellantis. BMW was also involved at the time.
With the second major project, according to Altmaier, the Federal Ministry of Economics is now providing around three billion euros. This is intended to trigger private investments of over 13 billion euros in this country. The Federal Minister is also counting on the creation of several thousand qualified jobs.
The battery is the most expensive component in an electric car – and at the same time the decisive factor for its attractiveness. Production is currently still dominated by Chinese, Japanese and South Korean companies. European car manufacturers therefore run the risk of earning less and less from the added value of electric vehicles in the future.
The lead of the Asian battery producers is “big and huge”, said Altmaier. However, the European transfer of knowledge enables “that we will be world leaders in this area in terms of quality and ecology”.