France, Germany, Sweden urge EU to avoid China reliance on EV batteries

France, Germany and Sweden called on the incoming European Commission on Thursday to ensure the future of battery production in Europe and avoid relying on China to meet its needs for the green transition.

In a paper released ahead of an EU ministers' meeting to discuss EU competitiveness on Thursday, the three EU members said European battery companies faced common challenges of scaling up in a global playing field that was not level.

The EU needs to cut red tape, speed up approval processes, create better routes to funding and markets for new companies in the sector and allocate more EU funding for the battery industry, they said.

"If we are to succeed with the green transition we need to get the European battery sector flying and taking a proper share of the market," Swedish Industry Minister Ebba Busch told reporters before the meeting in Brussels.

The issue is acute for Sweden after Northvolt filed for Chapter 11 bankruptcy protection in the United States last week. The Swedish government has repeatedly said it won't invest in Northvolt to save the company, which has been Europe's biggest hope for an electric vehicle battery champion.

Busch said a strong message from Brussels that European battery making had a solid future would increase the chances for Northvolt to secure new capital from other sources.

China has taken a huge lead in powering EVs, controlling 85% of global battery cell production, International Energy Agency data shows. Busch said the European Union needed to learn from its previous reliance on Russian gas and not become dependent again on an economic rival.

"The green transition might end up becoming a Chinese transition in Europe... Just look at solar cell or wind power sector, a lot of that has been taken over by third-country investment," she said.

The new European Commission, which takes over on Dec. 1, plans in its first 100 days to issue an outline of how the bloc can compete economically while meeting its climate targets.

Busch said the three countries behind the paper were calling for improved regulation to promote new projects and conditions to allow companies to scale up.

German state secretary Berhard Kluttig said the EU also needed to look to sources other than China for key raw material inputs.

"There are many options, Australia, Canada and even Europe, we have lithium projects, so it is also important that we focus on these alternative sources for battery materials," he said.

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