Aluminum   $ 2.1505 kg        |         Cobalt   $ 33.420 kg        |         Copper   $ 8.2940 kg        |         Gallium   $ 222.80 kg        |         Gold   $ 61736.51 kg        |         Indium   $ 284.50 kg        |         Iridium   $ 144678.36 kg        |         Iron Ore   $ 0.1083 kg        |         Lead   $ 2.1718 kg        |         Lithium   $ 29.821 kg        |         Molybdenum   $ 58.750 kg        |         Neodymium   $ 82.608 kg        |         Nickel   $ 20.616 kg        |         Palladium   $ 40303.53 kg        |         Platinum   $ 30972.89 kg        |         Rhodium   $ 131818.06 kg        |         Ruthenium   $ 14950.10 kg        |         Silver   $ 778.87 kg        |         Steel Rebar   $ 0.5063 kg        |         Tellurium   $ 73.354 kg        |         Tin   $ 25.497 kg        |         Uranium   $ 128.42 kg        |         Zinc   $ 2.3825 kg        |         

HONG KONG, May 31 (Reuters Breakingviews) – Chinese cash is set to fuel Europe’s green mobility challenge. More than one in five cars sold in the continent last year was electric, making the region the world’s second largest market for e-vehicles after China. That offers an enticing new opportunity for the battery makers from the People’s Republic, which already supply European brands such as Volkswagen (VOWG_p.DE), BMW (BMWG.DE) and Stellantis (STLAM.MI), as well as globetrotting compatriots like Volvo-owner (VOLVb.ST) Geely. Over-reliance on Chinese market leader CATL (300750.SZ) and its peers could be a risk. But rival European battery groups are still scarce, and global carmakers have more to gain than lose.

Chinese battery suppliers like Contemporary Amperex Technology (CATL), SVOLT, Envision, and most recently EVE Energy (300014.SZ), are shaking up Europe’s e-mobility supply chains. The Asian country’s global investments in batteries quadrupled to 14.2 billion euros last year from the year before, Rhodium data show. At 4.5 billion euros, investments in projects to build new plants in Europe overtook spending on mergers and acquisitions. It’s not just battery makers. Suppliers such as Shanghai Putailai New Energy Technology (603659.SS), which produces anodes – a key component allowing current to flow through a battery – are also moving west.

The influx will transform Europe’s fledgling electric-car industry. Firstly, the Chinese newcomers can control costs. In April, prices for cells – modules which are piled together to create battery packs – were often more than a quarter lower in China than in Europe, according to a survey by segment specialist Benchmark Mineral Intelligence.

European battery makers will struggle to compete. They lack the sheer size of rivals like the $140 billion CATL, which accounted for more than a third of global battery sales in the first quarter of the year, according to Bernstein. Its $7.6 billion Hungarian facility, scheduled to start mass production in 2025, will be Europe’s biggest ever, with an annual capacity of 100 gigawatt hours. Likewise, Putailai’s $1.3 billion Swedish plant will be Europe’s largest anode factory.

Affordable access to raw materials is another advantage. Scale helps companies from the People’s Republic negotiate more favourable contracts. Also, Chinese car and component makers seem to be leading the race to buy into miners and producers of key cell ingredients: 40% of such deals in the last five years have involved a Chinese buyer, Dealogic data show. Companies from the Asian country have spent around $4.5 billion to acquire stakes in nearly 20 lithium mines in the past two years, according to the Wall Street Journal.

Last but not least, the Chinese manufacturers offer more advanced technology, such as lithium-iron-phosphate chemistries, which render batteries cheaper and safer and are yet to be manufactured at a commercial scale by European or South Korean rivals like LG Chem (051910.KS) and Samsung SDI (006400.KS).


Not everyone will win though. By setting down roots in the relatively young European market, Chinese competitors could make it harder for up-and-coming stars such as Sweden-based Northvolt to mature. That might also invite unwanted regulatory attention. While watchdogs have traditionally found it harder to scrutinise greenfield investments such as factories, new policies and growing geopolitical tensions give European Union authorities a bigger toolbox.

Europe’s Foreign Subsidies Regulation, which came into force in January, lets the European Commission examine both EU and international investments for potential benefits gained through government grants. Those powers extend to greenfield sites. Another initiative, provisionally agreed by the European Parliament and EU governments in December, will set stricter standards specifically for battery supply chains, mandating responsible sourcing of raw substances, and recycling to recover key materials. Although the rules will apply to all companies, not just Chinese groups, they could complicate the process of setting up shop in the 27-nation bloc. Meanwhile, the large subsidies unleashed by the United States’ Inflation Reduction Act have sparked a debate about whether other countries should do more to support local companies. Earlier this month, French President Emmanuel Macron argued that non-EU players should not access incentives paid for by French taxpayers.

More exacting EU restrictions could be bad news for carmakers such as Mercedes-Benz (MBGn.DE), which already plans to buy batteries from CATL’s Hungary plant. A crackdown could also raise the possibility of EU carmakers facing tit-for-tat measures in the Chinese car market, the world’s largest.

European companies will have to hope bureaucrats take a leaf out of China’s own playbook. When Tesla (TSLA.O) first announced its mega factory in Shanghai in 2018, the plant’s mooted output of 500,000 vehicles per year was equivalent to nearly half of the entire country’s annual electric-car sales at the time, making it a formidable competitor for smaller Chinese brands. Indeed by 2020, a year after the first car rolled off its new production line, Elon Musk’s company sold more than twice that target and its flagship Model 3 was China’s best-seller. But Tesla’s giant factory also offered benefits for China. It created a critical production mass, kickstarting the nascent industry’s supply chains and shrinking costs for domestic and international rivals.

Given the chance, Chinese battery makers can power up Europe’s own supply chains, and its auto companies too.