Wrapup 3: Europe set for two new gigafactories as it lures battery makers

Microvast Holdings

12/05/2023 17:07

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      Northvolt could invest 3-5 bln euros in plant - sources
    

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      Over 600 mln subsidies for Northvolt pending approval -
source
    

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      Europe, U.S. jostling for green industrial investments
    

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      Northvolt may build two plants in parallel - spokesperson
    

  
    By Supantha Mukherjee and Victoria Waldersee
       STOCKHOLM/BERLIN, May 12 (Reuters) - Two electric
vehicle battery makers plan to spend around 10 billion euros
($11 billion) on factories in Europe, they said on Friday, after
Europe loosened state aid rules for green industry projects in a
bid to win the subsidy race with the U.S.
    Both plants will start production in 2026, employ thousands
of people and supply batteries to European car makers.
    After months of worry that it would opt for an investment in
North America over Europe, Sweden's Northvolt said it is set to
pick Heide in northern Germany for its factory as long as
subsidies are approved, estimated by one source close to the
matter to be over 600 million euros.
    Taiwan's ProLogium, meanwhile, announced a new plant in the
French city of Dunkirk after France offered deal sweeteners and
competitive power prices, executives from the company said.
    With Taiwan a focal point in tensions between Washington and
Beijing, the company also wanted to secure a base overseas.
    Europe, home to carmakers such as Volkswagen  VOWG_p.DE  and
BMW  BMWG.DE , has been trying to lower dependency on Asian
countries for batteries that will power green electric cars,
though the region still relies heavily on Asia for sourcing and
processing raw materials like lithium, cobalt and manganese.
        High energy prices and a lack of subsidies comparable to
the $430-billion U.S. Inflation Reduction Act has prompted
companies from Volkswagen to utility Enel and cement maker
Holcim to call on the European Union to do more to encourage
investment.
    Volkswagen was expected to announce a battery plant location
in Europe late last year but said in March it is awaiting more
clarity from Europe on subsidies before making a decision.
    For Northvolt, Europe's 'Temporary Crisis and Transition
Framework' (TCTF) which simplifies conditions for countries to
grant aid to green projects and allowed Germany more freedom in
offering support for the battery plant, helped firm up its plans
to build in the region, a spokesperson said.
    How energy prices could be brought down was unclear, the
spokesperson added, though supply is not a concern given high
amounts of offshore wind near the plant's planned location.
    Northvolt, alongside Volkswagen, is the furthest ahead among
just a handful of European players paving the way for a
home-grown battery industry, with a large chunk of planned
capacity in Europe to be owned by Asian players.
    The plant by Taiwan's ProLogium would be its first overseas
car battery factory. French President Emmanuel Macron lobbied
for the factory to beat other contestants like Germany and the
Netherlands.
    Both Germany and France sweetened the subsidy pot after the
U.S. last year unveiled its major tax subsidies to boost
domestic manufacturing.
    The subsidies for Northvolt would be the first provided by
Germany under Europe's TCTF programme, adopted in response to
Russia's invasion of Ukraine and expanded this year to support
green transition projects.
    The support still needs the approval of the European
Commission.
    A second plant could also be constructed in parallel
elsewhere, a Northvolt spokesperson said, including in North
America.
    Foreign and domestic companies have invested in Germany to
feed its growing EV industry. CATL  300750.SZ , which has been
expanding rapidly outside China, is ramping up production of its
plant near Erfurt in Germany and BASF  BASFn.DE  is building a
battery materials site in Schwarzheide, eastern Germany.
    U.S. Microvast  MVST.O , meanwhile, built a factory in
Ludwigsfelde, south of Berlin.

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Battery maker Northvolt in talks to hire IPO banks -sources   
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Northvolt to build its third battery gigaplant in northern
Germany     urn:newsml:reuters.com:*:nL5N2VH4DQ
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 (Reporting by Victoria Waldersee, Supantha Mukherjee, Andreas
Rinke; Additional reporting by Gilles Guillaume in Paris;
Editing by Matt Scuffham, Elaine Hardcastle)
 ((Victoria.Waldersee@thomsonreuters.com;))