EU Eases Funding for European Battery Push

The European Union is loosening anti-competitive rules to allow member countries to fund battery research and build giant factories to make batteries for electric cars, the Financial Times reports.

The policy shift reflects the EU’s view that local capacity to develop and make EV batteries will be strategically critical as the transport network becomes electrified. Leaders worry that Europe’s auto industry, which employs some 13 million people, will wither if it is forced to rely on Asia for batteries.

Europe is in catch-up mode on EV battery manufacturing. FT cites data indicating that Asia currently controls about 80% of the world’s battery production capacity, followed by the U.S. at 15% and Europe with less than 4%.

The EU’s new philosophy allows its members to fund 100% of local battery research, provided some projects involve other member countries, FT says. The Horizon 2020 research fund offers €1 billion for local and regional battery research and production demonstration projects. Cash to build battery “giga-factories” is available through the European Fund for Strategic Investment.

FT notes that Asian battery companies such as LG Chem and Samsung SDI are adding capacity in Poland and Hungary, respectively, even as the EU rushes to create its own production centers.