France to invest heavily in battery cell production

19 February 2019

The French Government is to invest €700 million over the next five years to ensure the country becomes a leader in electric vehicle (EV) battery technology.

President Emmanuel Macron announced the move in a speech to the country’s International Organisation of Motor Vehicle Manufacturers (OICA), announcing the funding as part of his strategy to boost domestic carmakers and reduce their reliance on Asian companies.

Macron also believes the investment will help companies such as Renault and PSA Group to fend off competition in the EV market, as well as in autonomous technology, from Asian carmakers and US technology giants.

The move is similar to one announced by the German Government in November. They are setting aside €1 billion to support battery cell production in the country to reduce reliance on overseas components in its domestic market. Germany also sees the increase in battery production as a way of shoring up jobs in the country as the automotive industry takes a hit from a decline in diesel sales.

The French President said that two factories would be built, one in France, the other in Germany, as part of a French-German initiative.

′As the president of France, I cannot be happy with a situation where 100% of the batteries of my electric vehicles are produced in Asia,’ Macron said.

′In terms of sovereignty and independence, I think it’s not good in the long run for our industry and the European industry to be 100% reliant on non-Europeans. So that’s why according to me on batteries we need a European wake-up call.’

Some carmakers assemble battery packs in Europe but the continent has no significant production of battery cells themselves. Currently, this market is dominated by a handful of firms, including China’s CATL and Korean businesses LG Chem and Samsung.

PSA Group is a supporter of efforts to create a European manufacturer of cells, while Renault has also intimated that it would look to purchase from such a business. It currently buys batteries for its Zoe model from LG Chem. In June, the company said it is to accelerate its ′Drive the Future’ strategic plan with a large investment in the production of electric vehicles in France.

Macron’s plan will also include facilitating the construction of electric vehicle charging points, giving more visibility to automakers about electric vehicle bonuses for consumers and increasing the Government’s EV purchasing targets.

France is looking to ban the sale of petrol and diesel vehicles by 2040, and has already seen sales of diesel cars drop in the last twelve months as concerns grow about air pollution. The Government wants sales of EVs to top one million by 2022. It hopes for 600,000 zero-emission vehicle sales in four years, together with 400,000 plug-in hybrid (PHEV) registrations.