EU backs Spanish subsidy program for EV batteries

The EU Commission has approved an 837 million euros program by the Spanish government to support the production of batteries for EVs. This reports the news site elective.com. The program is open to battery manufacturers and suppliers of essential components or related materials.

The Spanish government plans to launch two new electric vehicle and battery production tenders in July 2023 under its eMobility funding program PERTE.

Volkswagen, Renault, and Ford plan investments

In the first PERTE funding round, Volkswagen received almost half of the funds. This involved support for electrifying the plants at Seat Martorell and Pamplona and creating a battery ecosystem for EVs at the battery plant in Sagunt near Valencia.

But Volkswagen is not leaving it at that. The group also plans to submit a new application to produce additional EVs in Spain. In addition, the VW Group wants to invest 10 billion euros in electric mobility projects in Spain.

Other carmakers, such as Renault and Ford, plan investments in Spain. In addition, several potential battery cell factory projects, such as those by Tata Motors (that would produce cells for Tata subsidiary Jaguar Land Rover) or Inobat Auto, depend on the PERTE funds.

EU approval of the 837 million euros to support battery production now paves the way for the second call of the eMobility funding program PERTE.

For that matter, Volkswagen currently has three confirmed battery plants in Europe. Besides the one still under construction in Valencia, there is one in Skellefteå in Sweden, Northvolt runs, and Salzgitter in Germany. In addition, a fourth battery plant would be built in an as-yet-unnamed East European country.

Part of the Green Deal Industrial Plan

The EU wants more than half of Europe to run on renewable energy by 2030 and reduce carbon emissions by 2050. However, to achieve that goal within the implementation of the Green Deal Industrial Plan, massive investments are needed, including in producing batteries for EVs.

Therefore, it also wants to commit to a complete domestic battery value chain covering the entire life cycle, from design to end-of-life. It is a vital link for a clean energy transition and a competitive industry.

Reduce European dependence

As the European supply chain is very vulnerable and highly dependent on imports, the EU also wants to reduce European dependence on third countries and strengthen the security of supply of its own industry. For example, 97% of lithium used in batteries for EVs comes from China.

Of the strategic raw materials it consumes annually, Europe will in the future have to mine at least 10% itself, on its own soil, in other words: 40% will have to be able to process itself, and 15% should be recyclable.

The EU Commission has also granted 10 million euros to the European Battery Alliance (EBA) Academy to come up to speed.