June 18, 2024

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Germany Beats America in Race to Build Mega Battery Electric Car Factory

Germany Beats America in Race to Build Mega Battery Electric Car Factory

Swedish battery maker Nordvold has announced plans to invest billions of euros in Germany to set up a factory specializing in the production of batteries for electric cars. A great victory for Berlin, a bitter disappointment for America.

Why is this important?

The battery race between the U.S. and Europe has intensified as electric vehicles become more important as the European Union bans sales of new combustion engine cars by 2035. The Americans introduced deflationary legislation to get as much on their boat as possible, but Europe was not idle.

In the message: Nordvold reports that it may invest between 3 and 5 billion euros in a new factory in Germany Euroactive.

  • The Swedish company is expected to receive around 500 million euros in German subsidies, European media cited two sources close to the matter as saying.
  • After commissioning the plant will have an annual production capacity of 60 GWh and will be able to power approximately one million electric vehicles.
  • The German government and local authorities hope to meet the necessary conditions this year to start construction as soon as possible and deliver the first battery cells in 2026.
  • “With Northvolt’s next steps, Germany can look forward to one of the most important projects in the energy and transport transition, which will create thousands of jobs in green technologies,” German Economy Minister Robert Habeck said in a statement. Declaration.
    • Specifically, the minister says 3,000 jobs will be created in Hyde, where the factory is being built, but “thousands more in the surrounding industry and service sector” should follow.
  • Both Nordvold and representatives of the German government pointed out that the exact investment and funding figures are not final and are subject to approval by the European Commission.
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between the lines: A major victory for the European Union against the US.

  • Many companies have announced that they are accelerating their investments in North America thanks to the IRA, sometimes at the expense of Europe (notably Tesla in Germany), and Nordwold in particular has indicated that they are suspending plans to focus on Germany. America, thanks to the Inflationary Reduction Act (IRA)’s lucrative subsidies.
  • In early March, the EU’s counteroffensive finally began.
  • The Union announced a “Temporary Crisis and Transition Framework” (TCTF) to promote support measures in key sectors for the transition to a carbon-neutral economy. This would level the playing field in Europe with the US.
    • In certain circumstances, this mechanism allows EU member states to match subsidies from other countries, including the United States.
  • It is this TCTF that Germany wants to use to finance this Northwold mega-factory.
    • “The planned state aid must be approved by the European Commission based on the TCTF; the German federal government and the European Commission are engaged in constructive negotiations. If the European Commission approves the funding, the TCTF will be used in Germany for the first time,” explains Robert Habeck.
    • “The EU has positioned itself with the Northwold TCTF and is very good at responding to the US IRA at such short notice,” said Daniel Günther, the prime minister of Germany’s Schleswig-Holstein. .
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