More EV Manufacturing Slowdowns As Europe Scrambles To Ramp Up Battery Production

More EV Manufacturing Slowdowns As Europe Scrambles To Ramp Up Battery Production

Battery availability has recently been a major constraint on EV production. Tesla has been frequently battery cell constrained, Mercedes delayed its EQC due to battery production, the Jaguar paused I-Pace production because of battery availability problems, and now Audi E-Tron manufacturing has temporarily stopped due to “bottlenecks in the parts supply.” The company said the issue was not China or Coronavirus related, and given all the other battery supply problems, it isn’t much of a stretch to think that is also the case here.

Either way, battery availability has frequently been a problem for EV manufacturers. Sales of many new electric vehicles have been lower than expected, which makes it odd that battery availability is still a problem. With increasingly strict emissions regulations and fines for missing targets, this could become a bigger problem in the near future.

China is still way ahead in battery production, but Bloomberg reports that the EU is moving fast to build out its capability. There are half a dozen battery plants under construction in Germany alone. The EU and national governments are spending billions of dollars to incentivise and aid battery manufacturing projects.

German Deputy Economy Minister Thomas Bareiss is afraid the country will “lose out on the centrepiece of electric cars,” if they continue to let China own battery production. However, Europe has strict environmental rules and public opposition to chemical plants and mines that make it difficult and expensive to build out the supply chain. Some materials don’t travel well, and the relatively lax regulations in other parts of the world make for less expensive production.

EV sales are expected to substantially increase in the near future, driven partly by the EU’s strict fleet emissions requirements. The demand will drive more battery manufacturing, but maybe not before we see more production slowdowns.