PSA, BMW, VW, Tesla All Compete to Set Up Gigafactories in Europe

In December 2019, the (EC) European Commission approved a project for research and innovation of batteries. The project, which is worth 3.2 billion euros, was jointly filed by seven EU member states. The project’s aim is to bring about sustainable technological innovation that reduces CO2 in the entire battery value chain from raw materials to reuse. The project involves 17 companies from seven countries, including BMW.

Notably, the project was approved within the Important Projects of Common European Interest (IPCEI). It introduces a de facto regional industrial protection policy in the battery sector in a way that it will not distort the competitive environment and benefit Europe as a whole. In addition, the project puts CO2 reduction in the entire life cycle to the forefront and it may activates discussion on life cycle assessment (LCA) in the future.

With the approval of the project, a new gigafactory concept has been launched in Germany and France. The project is expected to generate 5 billion euros of additional private investment. The construction of a pilot plant is scheduled to start in France in 2020. After that, the construction of a commercial-scale gigafactory is planned to be launched in Germany by the mid-2020s at the latest. The goal is that around 30% of the world’s battery production will be concentrated in Germany or Europe by 2030.

In addition to a Franco-German consortium set up by PSA, Opel and Saft and approved by the European Commission in April 2019, a joint venture between VW and Northvolt established in September 2019, and Tesla have all announced plans to build gigafactories in Europe.