European Battery Companies Face Uphill Battle to Meet Surging EV Demand — Talking Markets

livemint.com:

European battery startups are grappling with how to make less-expensive batteries at scale as they race to meet demand from an electrifying car industry, and while investors are still buying in, there is less enthusiasm than a few years ago. Battery production capacity to meet demand from car makers, whose electrification march is fueled by European Union climate policies, simply doesn’t exist yet in the EU, said Gert Meylemans, the general manager of Eurobat, an association that represents automotive and industrial battery manufacturers. Eurobat commissioned a study in 2019 that suggested battery supply would match demand by 2024.

Now, the group says that parity won’t even happen by 2030. Meanwhile, the penetration of fully electric cars in the EU automotive market hit an all-time high of 20% of all new sales in August, according to the European Automobile Manufacturers’ Association. Investments in Europe’s battery industry continue, but Eurobat says investor enthusiasm has been dampened by the war in Ukraine, pandemic effects, supply-chain disruptions, higher raw materials and energy prices, and a complex regulatory framework in the EU.

Europe is also competing with the U.S. and its attractive subsidies for the industry through the Inflation Reduction Act, which the EU hasn’t matched. “These things have really disrupted the whole industry, in a way, both for the established players but also for the newcomers," Meylemans said.