I saw this table today from ICCSINO. There is a discussion below the original post, including some clarifications and corrections to the table. But no amount of polishing can hide the fact, that more than 2/3 of EU planned battery capacity is at risk. Despite being a leader in EV adoption, the EU is failing to join the EV revolution. Here is why.
EU car makers can’t switch to EV’s. And they won’t be able to.
EU carmakers are trapped in the classic Innovator's Dilemma. Their existing product (ICE) sells well and pays high premiums. The new product (EV) is niche, requires reorganizing 80% of the supply chain, and its margins are lower. How on earth do you convince any investment committee to go with EV? You don’t. Cheaper to lobby lifting ban on ICE sales.
The EU battery industry is short on manufacturing skills
While the EU has excellent R&D capabilities, it lacks high-volume manufacturing skills in batteries. Where would they get them, if all the manufacturing is done in China and Korea? But without big factories in the EU now, there will be nowhere to train your staff. When I was leading the acquisition of EnerTech Inc. by Rosatom, my main goal was getting access to 20+ years of experience in Korean manufacturing.
Environmental regulations delay building factories
While I’m generally ok with environmental regulations, one major concern I hear from the EU battery startups and producers are the long time it takes to get all of your approvals in order. To give you an example, a 500 MWh electrode-only plant was planned, approved, and executed in just over a year in Korea. The same plant in the EU would take at least 2 years just to get all necessary approvals.
Whining about the EU bureaucracy and automotive OEM’s idiocy aside, what startups and businesses could do?
Forget about established car makers. Build your own, new EV brand. Build it from scratch, and source batteries for now from China. There is no shortage of automotive design and manufacturing skills in the EU. This will take at least 5 years from concept to homologated and ready-to-roll vehicle. A smart OEM will set up a new, independent
Stick with cell assembly for now. Outsource electrode manufacturing to Asia. Electrode production is the most polluting and energy-consuming part of the cell manufacturing process. You’ll get your gigafactories up and running faster and will have more time to get experience in cell manufacturing during the next four to five years. After that, you can add electrode manufacturing.
To learn more about the Innovator’s Dilemma, check out my review of Clayton Christensen seminal book “The Innovator’s Dilemma” in my blog https://www.askerov.pro/post/facing-the-innovator-s-dilemma