EURACTIV France spoke to Ambroise Fayolle, Vice-President of the European Investment Bank (EIB) and Benoît Lemaignan, CEO and co-founder of Verkor, about the opportunities and challenges for the sector following the funding of a new French innovation center to manufacture batteries for electric vehicles.
Read the original interview in French here.
The investment in French start-up Verkor’s Innovation Center (VIC) is part of Europe’s ambitions to build a globally competitive battery industry. To this end, the Union worked on the European Battery Alliance (EBA), an initiative launched in 2017 to secure the switch from fossil fuels to electrical energy.
The EBA, which now includes more than 500 companies, is backed by the European Investment Bank (EIB), “the European bank for the climate”, according to the EIB’s Fayolle, who told EURACTIV France that electric vehicle batteries are the “sector “ are of the future”.
The EIB provided a EUR 49 million loan to Verkor’s project, building on its catalog of investments in other large-scale battery initiatives across Europe, including Northvolt in Sweden, to which the EIB lent EUR 52.8 million in 2018.
“If these pilot projects meet the targets, it will pave the way for larger funding,” Fayolle said.
In the coming months, Verkor will start its first 150 MWh/year battery pilot production line at its VIC. According to Verkor CEO Lemaignan, the first integration of these batteries into vehicles is planned “as early as 2023”.
While the VIC will be based in Grenoble, the start-up is preparing to finance and design a battery factory in Dunkirk, France, with construction expected to start in the first quarter of 2023 and enable first production in 2024.
In the first year, 2 GWh/year of electric batteries will be produced and the target for 2027 is to reach 16 GWh/year.
“That would be 200,000 or even 300,000 batteries, depending on the size of the batteries [from 50 to 90 kWh]’ Lemaignan said.
After all, the start-up is aiming for a production capacity of 50 GWh/year.
major investments required
“In 2030, the demand for [battery] The capacity in Europe will be 1,000 GWh, or around 80 plants like the first unit (16 GWh/year) in Dunkirk,” said Lemaignan.
According to his calculations, the industry will need to invest between 120 and 130 billion euros over the next eight years. However, the automakers estimate that the revenues generated will amount to 60 billion euros a year, he added.
Under these conditions, “Europe has the means to become a leader in the battery industry,” explained the Verkor co-founder.
EIB’s Fayolle added that after the war in Ukraine, the EU authorities “want to accelerate the energy and environmental transition”, notably through the REPowerEU programme.
REPowerEU has committed to providing €210 billion in investments by 2027, “part of which will benefit the electric battery industry,” Fayolle said.
However, there are still challenges in the production and processing of raw materials.
“It’s still difficult to get projects off the ground because of the environmental impact of these two phases,” explained Lemaignan.
“While today it is necessary to invest in resource extraction, one day we will have to do without it,” he said. According to Lemaignan, by 2035-2040 “battery recycling will ease the pressure on funding inside and outside Europe”.
In other words, “We need to understand that today’s batteries will be tomorrow’s rare earth mines,” he said.
With large-scale recycling of battery components still a long way off, Lemaignan says his company is investing in traceability solutions for the batteries it manufactures.
However, “there are still limitations to this process that we need to improve to meet the demands of a greener industry,” he acknowledged.
Low-CO2, affordable electricity
Additionally, the battery industry will depend on the availability of low-carbon, affordable electricity.
In this context, for Lemaignan, the planned end of regulated access to historic nuclear energy in 2025, which will allow French energy company EDF to sell nuclear power capacity at a price lower than that on the market, “raises questions”.
“The response of the authorities will be more than crucial,” he said.
While the deployment of an electric vehicle fleet will also depend on the parallel provision of a sufficient number of electric charging stations, for Fayolle the EIB “should not overestimate this need”.
The first charging station “will be the socket at home or at work,” said the EIB Vice-President.
Lemaignan agreed, adding that “we’ll only end up using electric charging stations for longer trips 2-3 times a year”.
“The electricity stored in the batteries connected to the grid will allow us to overcome peak consumption in the electricity grid thanks to the bidirectional principle,” he said.
This could “largely solve the problem of fluctuations in renewable energies [and therefore] significantly change the future of the energy ecosystem,” concluded Lemaignan.
[Edited by Nathalie Weatherald/Zoran Radosavljevic]