A representation of the planned mobile battery plant through Verkor. The startup says it would employ about 2,000 people, with an initial of 16 gigawatt hours.
PARIS – As sales of electric cars grow in Europe, calls are being developed for mobile battery brands to establish production on the continent than in Asia.
One company that hopes to meet this need is Verkor, a French startup that has an initial investment of 1.6 billion euros to establish a mobile plant that would be operational until 2023 with an initial capacity of 16 gigawatt hours. Verkor works with Schneider Electric, the French power company, as a technical partner.
Verkor says the new plant will create more than 2,000 jobs and require an area of at least 500 acres, the maximum likely in France.
So far, top European car brands have bought their cells from Asian giants such as LG Chem of South Korea, which has a factory in Poland, and CatL from China, which is building a European plant in Germany. According to the World Economic Forum, Chinese battery brands have 85% of the global lithium-ion market, while Europe has 3%.
A 2019 McKinsey study found that Europe had only 29 gigawatt hours of battery production, a figure expected to reach 290 gigawatt hours by 2025, with more than 10 other producers. But at the same time, China’s capacity will increase from 294 gigawatt hours to about six hundred gigawatt hours, according to McKinsey.
The PSA Group is working with the French power organization Total to build two mobile plants, one in France and one in Germany. The Renault Group has announced its goal of joining the partnership.
In the UK, startup Britishvolt is making plans for a battery plant near the Aston Martin SUV plant.
Still, there will be a lot of business to do for corporations like Verkor. Automotive experts and executives expect battery electric cars to account for the majority of new car sales in Europe by 2030, as emissions regulations make internal combustion engines obsolete.
“The electric vehicle market is obviously accelerating quite quickly,” said Benoit Lemaignan, Verkor’s chief executive, with more selection of buyers, charges are starting to fall and the ownership charge reaches parity with internal combustion cars. “Next year and 2022, we will see electric cars take over, at least symbolically.”
Verkor has already funded a feasibility study and has spoken to several car brands about their needs. Lemaignan said the company seeks financing from a variety of sources, adding personal investments, automotive corporations and government-backed investment banks such as Bpifrance.
If everything goes according to plan, in the first part of next year it will be decided, probably although not necessarily in France, and production will begin in 2023.
Verkor will focus basically on electric passenger cars, but there are also opportunities in heavy trucks and buses, Lemaignan said. A potentially exciting niche is the conversion of internal combustion cars into electric power, not only passenger cars, but also commercial cars like cranes, he said.
Lemaignan said a European gigafactory can “clearly” be worth competing with Asian suppliers, noting that hard work and administrative prices account for about five percent of the battery value, as does shipping. Having a mobile plant near a car plant would mean the maximum shipping prices for batteries manufactured in Asia.
However, he said, there are other reasons to locate mobile battery production in Europe. “The battery accounts for 30 to 45% of a car’s charge. So if we, European or French, have to rely only on Asian producers, we are replacing our dependence on Gulf oil with a dependence on Asian batteries,” he said. I.
“This is an exclusive opportunity to strengthen our sovereignty in terms of mobility,” he said, “not financially but also technologically.”
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