Europe up against Asian juggernaut in electric car battery drive - lithium battery pack

LONDON/FRANKFURT/STOCKHOLM, Reuters-
BYD, China's electric vehicle giant (1211.
Hong Kong) is considering introducing battery production in Europe, joining Asian competitors aiming to deliver on the green car revolution, and threatening Brussels to try to foster a family --grown industry.
The European automotive battery value chain is expected to be worth 250 billion euros (219 euros ).
£ 48 billion) by 2025, the European Commission launched an alliance of local companies last year to establish a 10-
20 large battery factories
But only Sweden's northworth and Germany's Thunder have plans for big lithium.
So far, Ion battery factories in Europe and some of Europe's leading automakers have reached agreements with Asian suppliers established in Hungary and Poland.
Julia Chen, director of global sales of BYD batteries, told Reuters, "We are considering battery production outside of China, including Europe . " She talked about the production of cars and household batteries. BYD (002594.
SZ, which also produces electric buses, cars and solar panels, said it was unclear where battery sites in Europe might be.
"It is possible as long as there is a market.
The company is backed by Buffett's Berkshire Hathaway.
Join SK Innovation in Korea (096770 ).
GS Yuasa, Japan (6674.
Chinese Contemporary Amperex Technology (CATL) (300750.
SZ) seek to find a battery factory in Europe.
LG Chem, South Korea (051910.
KS), Samsung SDI (006400.
KS) all have upcoming European factories, while China's GSR Capital has produced batteries at a British factory purchased from Nissan (7201. T).
While the Asian electric vehicle (EV) battery plant in Europe will bring jobs, Brussels is concerned that the group's companies are missing a growth industry and are likely to rely on foreign technology.
"We have to act quickly because we are having a global competition.
We need to prevent technical dependence on our competitors, "said Maros Sefcovic, vice-president of the European Commission, at the time of the European battery Alliance's launch of the action plan in May.
But some investors say they are wary of supporting European electric vehicle battery suppliers. Over the past decade, in the face of cheap Chinese imports, they have seen the founders of local solar panel companies.
European battery companies will need billions of dollars of support from the EU to counter Asian companies that have received similar state subsidies, and Brussels may be better off promoting the next one --
Generation solid
National Electric vehicle batteries, investors say.
Steven Reid, founder of Alexa Capital, said: "I believe no one in Europe can compete with Asians . " Alexa Capital Advises companies in the energy, technology and power infrastructure industries.
(Graphics showing battery supply and demand for electric vehicles in Europe: tmsmrt.
According to the metal consultant CRU www. rs, rs/2 JnDSOX) electric and hybrid vehicles are expected to account for 30% of the global automotive market by 2030. crugroup.
From 4% of the 86 million cars sold last year.
Global automakers are planning to invest at least $90 billion in electric cars and batteries, the most expensive components in cars, to fund hundreds of new models for the next five years.
At present, European automakers have been importing batteries from Asia, but this will become less viable as production increases.
Consulting firm P3 Group www said production in Europe would reduce transportation costs by one quarter. p3-group.
Com/en estimates.
But some automakers did not wait for the European auto industry to arrive, but signed contracts with Asian companies that came to the region.
BMW Germany (BMW)
According to Germany, while Volkswagen, Europe's largest car maker.
DE) said it plans to get batteries from LG Chem's Polish plant, which will open this year.
Daimler, maker of Mercedes.
DE) a contract has been awarded to CATL.
The European Commission's plan requires a battery-related study of 0. 11 billion euros to be assisted from two projects.
The EU innovation fund of 7 billion euros and the development of the EU "green battery" trademark.
Supporters of the initiative believe that Europe can open up niche markets by selling green batteries produced from raw materials from renewable energy and ethical sources.
Northwater, which has negotiated with European automakers, plans to launch a $5 billion Gigabit battery plant by the end of 2020 to produce 32 gigawatt-hour battery capacity annually by 2023.
But investors are wary of injecting capital into new battery companies in Europe.
A spokesman said Northwater's first round of financing plans to raise € 80 million to € 100 million to help build a testing plant, which took slightly more time than expected.
Ultimately, most of the financing was provided by the Swedish Energy Agency www.
Energimyndigheten.
Se/en and European Investment Bank www. eib.
Org, which offers loans up to £ 52. 5 million euros.
Experts say most of the profits in the battery value chain are generated by producers of raw materials, such as cobalt and lithium, as well as producers that load battery packs into complex systems.
"This value chain is a bit unbalanced, and that's one of the reasons you see a limited number of participants in Europe," said Peter karsong, founder and CEO of Northwater.
"But we think the model we are applying is changing that.
"Karsong, who once worked in the United StatesS.
Tesla (TSLA) pioneer electric vehicle.
O), Northwater says, by using cheap water and electricity and controlling raw material processing, Northwater can make a profit through economies of scale.
But northworth and terre may need some $2 billion in government funding to build their Gigabit plant --
Asad Farid, deputy director of Berenberg www, a private bank, said given the country's support for similar projects in Asia and the United States. berenberg.
De/en focused on battery technology.
Four months after the European Union launched Robert Bosch, the world's largest car supplier.
Gave up the plan to make the battery and said it was too risky. SOLID-STATE SOLUTION?
Investors are wary because of their experience with solar panel manufacturers, as well as the rapid advances in technologies that are drastically reducing the price of battery packs, consultant Arthur D. litle www. adlittle.
Com invested $190-
Now 250 per kilowatt hour.
"In the field of battery manufacturing. . .
It is very large in scale.
As a result, established producers in South Korea, China and Japan have a clear advantage over new entrants, "said Simon Webb, chief portfolio manager for Schroders www global and international stock teams. schroders. com.
Tim Crockford, who manages the Hermes investment management firm simact Opportunity Fund, said he is more interested in European companies studying cathode technology, which have significant barriers to entry in research and development.
"As you go further along the value chain, the appeal of the industry is reduced.
Like battery makers and battery pack fitters, this is a much more fragmented market with lower entry thresholds, "said Crockford.
Though Hermes has avoided big acquisitions
He said the company has taken a stake in a lithium producer and a company that produces cathode materials for batteries. The lithium-
The ion battery used now may also be so-called solid-
National technology that is expected to produce cheaper batteries with higher energy density.
"The battery's development cycle and the speed of technological progress are currently very huge, new and additional players have the opportunity to enter," said Timo Moeller, head of McKinsey's future mobile center in Cologne.
Developers in Europe believe this gives the region a chance to catch up.
Everyone is developing steadily.
National battery, so the gap (with Asia) will be smaller and smaller as we develop, "said Diego Pavia, CEO of InnoEnergy www. innoenergy.
A sustainable energy company that has invested in Northwater.