Automotive sector divided on ‘EU battery alliance’
The European Commission is pushing car manufacturers and OEMs to reflect on the creation of a big European battery alliance – like Airbus in aviation – to counter Asia’s lead. But the automotive sector is divided. PSA and Renault are all for it but think it should study second gen. batteries while BMW and OEMs such as Valeo and Bosch estimates the cost to be too high.
With this year’s Paris Motor Show, it is certain that the electric car revolution has reached Europe and its car manufacturers. Mercedes presented its new EQ brand and the new SUV EQC while Audi showcased its e-tron SUV that will be built in Belgium. French carmakers are also joining the party: PSA with the new electric DS3 Crossback to be launched at the end of 2019 and Renault with its K-ZE.
Carlos Tavares already ventilated doubts about the electric car and more specifically the current battery technology. As president of EU car manufacturers federation ACEA, he asked the EU for a ‘reality check’ on the electric car and on the real environmental cost of batteries but as CEO of PSA he was obliged to push for electrification.
“It’s urgent for Europe to have a champion of batteries”, repeats Mr Tavares. The CEO points out that, currently, batteries account for 40% of the electric car’s cost and Asia is dominating the market. “We want to preserve European suppliers”, continues Carlos Tavares who puts local support at the forefront of his plant’s competitiveness.
Second generation or solid-state battery
For Renault’s number two Thierry Bolloré, there is no hurry. “The error would be to rush into the production of a product which won’t be written of until five to seven years”, he adds, “we need to aim at something other that lithium-ion.”
The two major players in the French automotive world both think innovation will be the key. The solid-state battery may still be in its experimental phase, but this technology could provide considerably longer range to EVs while reducing the charging time.
Not a strategic dimension
In contrary to Renault and PSA, BMW is more sceptical about the future of a European battery manufacturer. “It’s not a strategic dimension”, declared member of BMW’s executive board Nicolas Peter, “we haven’t yet defined what technology will rule the market in seven to eight years. For now, it’s more strategic to work with Asian suppliers because China is the EV market leader.”
“Battery producers are mostly Asian, but they are building plants in Europe”, confirms a Valeo executive. OEMs are more sceptical to the development of a European battery alliance and prefer to work with the current providers and focus on developing electric motors themselves. Bosch even estimated that the European attempt to create ‘the Airbus of batteries’ would cost 18 billion euro.