One of the Biden administration's key midterm laws is appealing to battery component suppliers, who are delaying their plans in Europe to focus on the United States. The result is better subsidies and a flourishing market.
Novonix has definitely chosen the United States. Following the award of a $100 million grant from the US Department of Energy, the Nasdaq-listed battery component supplier spoke to Financial Times to confirm his plans, far from the Old Continent. “We have always envisioned expansion into Europe, but financing is becoming the biggest challenge”explained Dr. Chris Burns, the CEO of the Canadian company.
Like other heavyweights in the sector, Novonix was attracted by the $369 billion subsidy plan for renewable energies, signed in August 2022 by President Joe Biden. As for SRG Mining, another Canadian company specializing in battery materials, plans to meet European demand will involve a factory in Morocco. In the end, it is mainly China, leader in the sector, which invests in Europe. Shanghai Putailai is preparing a factory in Sweden when Ningbo Shanshan, its competitor, is planning in Finland.
All are seeking to expand the production of graphite, this essential component for the manufacture of lithium-ion batteries. It is the anode, this electrode which represents around 90 kilos of a 400 kg battery. Particularly controlled by China, its production depends on it for 75%, recalls Financial Times citing a Benchmark Mineral Intelligence report. And the projections for 2030 are not good for Europe, which will not see its share of production grow like that of the United States.
Novonix chose to start with production at 20,000 tonnes per year in North America, before accelerating to 150,000 tonnes, with financial assistance from the federal government. Its production plant in Riverside, Tennessee, will be complemented by another, a project that “will occupy us until the end of the decade”, announced Chris Burns. For Novonix to start an investment in Europe before 2030, demand will need to improve among battery manufacturers and manufacturers. It is then with the Humber graphite refinery, in Lincolnshire in England, that the company could join forces.
700 GWh in Europe, 3 factories in France
Volkswagen and Tesla will be particularly represented, both of which want to achieve production of 240-250 GWh of battery per year in Europe. In total, production is estimated at 700 GWh on the continent, with 12 factories in Germany, 3 in France (Verkor, ACC and ProLogium) and 3 in Italy. But without component suppliers like those turning to the United States, our dependence on China will continue. And the new 2024 ecological bonus will do nothing to motivate local production in addition to assembly.
Beijing has understood this and has been tightening the screws on graphite since last October. A real geopolitical weight. The country is the second largest reserve after Turkey, which was overflowing with 90 million tonnes in 2021, estimates Statista. The solution could then be synthetic graphite to free yourself from it. Benchmark Mineral Intelligence estimates that it will be possible to use up to 65% in the anodes of lithium-ion batteries. Mordor Intelligence, another analytics firm, projects the overall market to grow 40% to $4.2 billion by 2028.
Source :
Financial Times