European leaders have long complained that the United States is not doing enough to fight climate change. Now that the Biden administration has poured hundreds of billions of dollars into that cause, many Europeans are complaining that the United States is on the wrong track.
The new criticism raises fears that Washington’s approach will hurt allies with whom it should cooperate, robbing it of much new investment in unplanned electric vehicle and battery factories. It stems from deep concerns in the UK and other European countries. China, South Korea and other Asian countries.
It is this concern that some European leaders, including Germany’s second-highest-ranking official, Robert Häbeck, are calling on Västerås, a city about 90 miles from Stockholm, best known for its Viking burial mounds and Gothic cathedrals. This is the main reason why I strayed from
Officials are on the ground to negotiate with Northvolt, one of Europe’s few domestic battery companies. Led by a former Tesla executive, Northvolt is a small player in the global battery industry, but European leaders have offered hundreds of millions of euros to fund a factory in Europe. Häbeck visited the company in February and urged the company to pursue plans to build a factory near Hamburg, Germany. The company had instead considered postponing its investment in the United States.
“It’s definitely attractive to be in the US right now,” Emma Nehrenheim, Northvolt’s chief environmental officer, said in an interview in Vasteras last month. Northvolt declined to comment further on the Hamburg plant talks it promised in May.
The fight over Northvolt’s plans is fierce between the U.S. and Europe, and some European officials, seeking building blocks for electric vehicle manufacturing to avoid reliance on China’s monopoly on battery supplies. It is an example of unproductive competition by chain.
Auto experts say the tax credits and other incentives offered by President Biden’s key climate policy, the Inflation Control Act, will likely soak up some of the investment from Europe and give European countries their own incentives. He said he was under pressure.
Former European Trade Commissioner Cecilia Malmstrom said at a panel discussion last month at Washington’s Peterson Institute for International Economics that the United States had created a “massive subsidy race.” She called on leaders to “do not compete with each other, but jointly invest in the environmental transition.”
Biden officials argue that U.S. and European policies are complementary. They point out that government and private money going into electric cars and batteries will bring down prices for car buyers and bring more emission-free cars to the roads.
U.S. officials added that construction of battery factories and plants that process materials such as lithium is booming on both sides of the Atlantic.
The government’s efforts to promote electric vehicles “will drive some innovation and cost savings that will benefit not only Europe and the United States, but also the global economy and global efforts to meet the challenges posed by climate change.” ,” Deputy Treasury Secretary Wally Adiemo said in a recent interview.
The Biden administration is also in talks with European officials about making cars made with European battery materials and components eligible for U.S. tax credits. And the administration has interpreted the IRA, which Mr. Biden signed in August, to leave room for producers in Europe and elsewhere to benefit.
“European concerns about these companies being lured from Europe to the United States are fading,” said Abigail Wolfe, director of the nonprofit SAFE’s Center for Critical Minerals Strategy.
Still, the law forced European leaders to introduce a new industrial policy.
In March, the European Commission, the executive body of the European Union, proposed the Critical Raw Materials Act, a law to secure supplies of lithium, nickel and other battery materials. Part of the legislation requires the EU to process at least 40 percent of the raw materials needed by the automotive industry within the EU. The 27-nation alliance allows countries to provide more financial support to their suppliers and manufacturers.
Julia Poliskanova, senior director of the Brussels advocacy group Transport and Environment, said the money the US and Europe are pouring into electric cars will drive sales. She said the bill would require approval from the European Parliament and EU member state leaders and would bring some coherence to governments’ fragmented policies.
But Poliskanova added that European and U.S. policies risk canceling each other out. “It’s a zero-sum game because everyone is scaling up at the same time,” she said.
Business executives complain that applying for financial aid in Europe is bureaucratic and slow. Tom Einar Jensen, CEO of battery maker Freyer, which is building a factory in Mo i Rana in northern Norway and has plans to build more, said tax credits will be a key focus. He said the anti-inflation law would be simpler and faster. Factories near Finland and Atlanta.
In an interview, Mr. Jensen said the IRA had “dramatically increased interest in U.S. batteries.”
The future of European car manufacturing is at stake, especially for German companies. Mercedes-Benz, BMW and Volkswagen have already lost market share in China to local automakers such as BYD. Chinese automakers such as BYD and SAIC are also expanding into Europe. SAIC, which sells cars under the British brand MG, has a 5% share of Europe’s electric car market, ahead of Toyota and Ford in the fastest-growing segment.
European automakers are working hard to build the supply chains needed to mass-produce electric vehicles.
In France, President Emmanuel Macron wants to transform the northern region, where factory jobs are dwindling, into a center for battery production.
On Tuesday, the Automotive Sells Company, a joint venture between Stellantis, Mercedes-Benz and Total Energies, opened a plant in Billy-Belclau-Duvrain, France, to produce 300,000 batteries a year by the end of 2024. We aim to ACC has also invested a total of €7.3 billion ($7.8 billion) in Europe, including the opening of plants in Germany and Italy, with €1.3 billion of public aid agreed.
In Salzgitter, Germany, about 40 miles from Volkswagen headquarters, steel beams rise above concrete foundations as excavators and dump trucks hum nearby. Within months, outlines of a battery factory emerged from the field.
Volkswagen hopes to have a battery-making machine in place by the end of the summer. The company aims to produce up to 500,000 electric vehicle battery cells per year by 2025, which it said was possible because it built the factory on land it owns. ing.
Volkswagen is also building a factory in Ontario, but the company decided to do so after the Canadian government met U.S. incentives.
In Guben, a small town on the German-Polish border, Canadian company Rock Tech Lithium is building a factory to process lithium ore. Mercedes has a deal with Rocktech to supply lithium to battery makers.
It takes several years for these projects to be fully operational. Recently, the Guben site had become a field. The only construction activity was a deafening screeching truck loaded with tons of crushed rock.
Europe has some advantages, such as strong demand for electric vehicles. About 14% of new cars sold in the EU in the first three months of this year were battery-powered, twice as many as in the US, according to Schmidt Automotive Research.
But if Europe doesn’t move quickly to help the battery industry, “the local momentum will really be lost compared to the North American market,” said Rock Tech CEO Dirk Herbecke.
Chinese battery companies are avoiding the United States for fear of political backlash. But Chinese battery companies have announced investments worth $17.5 billion in Europe since 2018, according to the Mercator China Institute and Rhodium Group.
Political tensions between Western governments and China have put German automakers in a delicate position. They don’t want to be overly dependent on Chinese supplies, but they can’t afford to be displeased by the Chinese government.
BMW, Volkswagen and Volvo plan to buy cells from a factory in Arnstadt, Germany, run by Chinese company CATL, which is currently the world’s largest electric vehicle battery maker.
European executives and leaders are keen to work with Northvolt to balance its reliance on Chinese suppliers, and the company’s chief executive, Peter Carlson, has run Tesla’s supply chain for more than four years. was overseeing.
Northvolt wants to control all stages of battery manufacturing, including refining lithium and recycling old batteries. Nehrenheim, who is also a member of the Northvolt Management Board, said this would allow Europe to achieve supply chain independence and produce batteries in the most environmentally friendly way possible. “We are de-risking Europe,” she said.
The company develops manufacturing technology at its Västerås complex. Northbolt’s first full-scale plant is the size of the Pentagon, on a site in Sweden 195 miles south of the Arctic Circle, chosen for its abundant hydroelectric power. Northvolt also plans to build a plant in the United States, but has not yet announced a site.
Still, the company is ramping up production and is not among the world’s top 10 battery suppliers, according to consulting firm SNE Research. And construction of the Hamburg plant will be put on hold until EU authorities approve German subsidies.
Anna Swanson and Liz Alderman contributed to the report.
