The European Union (EU) has earmarked an additional one billion euros (about RM4.7 billion) in grants for electric vehicle (EV) battery cell manufacturing, Bloomberg reports.
The latest move by the EU aims to encourage domestic production and build a strong supply chain, all of which helps reduce the bloc’s reliance on components sourced from China, including cathodes and anodes used in battery production. Any funding will be tied to stringent sourcing criteria that support companies within the EU, and new patents from funded projects must be registered within its member states to retain critical intellectual property.
“The batteries call and hydrogen bank auction will also include specific resilience criteria to protect Europe against dependency on a single supplier,” said Teresa Ribera, the European Commission’s executive vice president for a clean, just and competitive transition.
Said hydrogen bank auction totals 1.2 billion euros (RM5.6 billion) and requires projects to limit the sourcing of Chinese electrolyser stacks, which are key components in hydrogen production, to no more than 25% of their total capacity. Meanwhile, another 2.4 billion euros (RM11.2 billion) set aside for net-zero technologies will be prioritised for projects that minimise the use of raw materials from non-European suppliers.
China is a big player in the EV supply chain, with BloombergNEF estimating lithium-ion battery demand to be at around 950 GWh in 2023. “Global battery manufacturing capacity was more than twice that, at close to 2,600 GWh. China’s battery production in 2023 alone was similar to global demand,” the research house reported.
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