February 13, 2019 / 3:00 PM / 8 months ago

President Macron to unveil plan to give Europe's electric battery industry a jolt

PARIS, Feb 13 (Reuters) - France will invest 700 million euros ($790 million) over the next five years into projects to boost the European electric car battery industry and reduce its carmakers’ reliance on dominant Asian rivals, said French presidency officials.

In a speech to the Paris-based International Organisation of Motor Vehicle Manufacturers later on Wednesday, President Emmanuel Macron will unveil his strategy to help the French car industry fend off competition on electric vehicles (EV) and autonomous cars from Asian and U.S. tech giants.

The plan comes after Germany in November set aside 1 billion euros to support battery cell production to reduce dependence on Asian suppliers and shore up jobs at home that may be at risk from the shift away from combustion engines.

French officials said the two European countries will work on Franco-German initiatives, at a time when their countries’ carmakers are waking up to the threats posed from relying on Chinese suppliers in an age of international trade wars.

“For a long time, European carmakers considered it was not up to them to develop battery production,” a French official said.

“Now, those advocating for an international division of labour are forced to realise that trade war exists,” added the official.

While some carmakers assemble battery packs, Europe has no significant production of their constituent cells - currently dominated by a handful of firms including China’s CATL and Korean rivals LG Chem and Samsung

“China has a very aggressive strategy to eventually dominate the electric vehicle universe by starting from electric batteries all the way up the value chain,” the official said.

Peugeot-maker PSA threw its support behind efforts to create a European manufacturer of electric car batteries in March last year.

Domestic rival Renault, which sources electric-car batteries from LG Chem, also said it could buy cells from a European supplier as production of electric vehicles ramps up.

“We’re noticing a realisation among carmakers that tomorrow’s competition will require a local battery industry,” the French official said.

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

$1 = 0.8847 euros Reporting by Michel Rose; Editing by Sudip Kar-Gupta/Laurence Frost

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