US law encouraging the private purchase of electric cars manufactured by North American companies, including their components, risks a serious backlash on Italian industry: almost half (48%) of planned lithium-ion battery production in our country today. the country may face delays, downsize or even cancel. This is the conclusion drawn from a report by Transport & Environment (T&E), the European lobby for the sustainable transport sector.
The analysis reveals how “68% of the expected lithium-ion battery production capacity in Europe for the next few years is at risk: this is determined above all by the Inflation reduction law (IRA)”. promoting the production of green technologies at home. Faced with this scenario, according to T&E, “The European Union should deploy joint financial support instruments to increase production volumes while promoting leaner authorization procedures”.
Using publicly available data and information, T&E analyzed the status of 50 announced gigafactories (large battery factories) in Europe, assessing the financial strength of projects, their authorization status, and the certainty (or uncertainty) of a manufacturing location. Finally, the analysis took into account the existence of possible links between the US and the companies that should build the factories. The study, published today, “shows that 1.2 TWh European battery production, capable of equipping 18 million electric cars, is currently at high or moderate risk of disruption or displacement. Without these production volumes, Europe will not be able to meet domestic demand for accumulators expected for 2030, therefore it has to resort to large quantities of imports from foreign competitors”.
Precisely, the most affected country will be Germany, where 87 GWh of generating capacity will be at high risk. Italy follows it with 45 GWh. However, if we look at the percentage data, the country that will be most affected will be our country with a high risk rate of 48%. The report cites the plight of Italvolt, whose CEO has also founded the bankrupt Britishvolt, and which is “in danger of losing its priority to its sister project Statevolt in California”, affected by the substantial state aid promised by Use with the. law to reduce inflation
Washington’s move coincides with Chinese dominance in the battery industry. According to BloombergNEF, Europe’s global share of new investments in lithium-ion battery manufacturing fell from 41% in 2021 to just 2% in 2022. “Battery investment in the US and China has continued to grow, and European companies are already showing signs of expansion in the Americas,” T&E writes. “Companies’ limited resources and scarcity of raw materials to increase production make the US-Europe battery race a zero-sum game,” still denounces the report, as the US seizes new production quotas.
“Industrial plans for battery production in the EU are under the crossfire of the US and China,” says Carlo Tritto of T&E Italia. provide strong support to increase production volumes”. At the beginning of February, the European Commission outlined its plan to respond to US anger and the challenge of the ecological transition, while the first concrete proposal, the Net zero industrial law, will arrive on 14 March. The plan is above all first, it focuses on supporting state aid from individual EU countries by reducing the limits of antitrust rules. A prospect that has attracted Germany and France, which are strong enough to inject public investment into their public coffers business, but which does not fully satisfy those who do not have the same firepower as Italy. Hence our government’s joint sovereignty. The demand for funding was fed by EU sources, a proposal that Brussels included in its plan, but which conservatives, including Germany, have already vetoed.
Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
