To avoid being trampled by the rise of (cheaper) electric cars from China, American and European car manufacturers are also launching plans to launch ‘affordable’ models on the market. Tesla’s CEO Elon Musk was convinced early on that the market for electric cars in the most expensive segment would be opened up, but now wants to produce an ‘entry-level model’ for less than 25,000 euros in his German factory. Stellantis will also launch a model with Citroën next year for 23,300 euros and Volkswagen is committed to offering its ID.2 for a comparable price.
They must be able to compete with Chinese manufacturers, but for the production of electric cars, Tesla and Stellantis remain largely dependent on the Asian superpower, which controls both the mining and processing of many crucial metals and raw materials for batteries. In a geopolitically unstable world, this is increasingly worrying Western builders. Just a few weeks ago, Beijing showed that it dares to use its control over raw materials as a geopolitical weapon with export restrictions on graphite.
European car manufacturers have every advantage in becoming less dependent on China, but is it possible to take the entire production process of electric cars back into their own hands? And is that also possible in an affordable way?
Well Teslas, no mines
Yes, says Peter Tom Jones, director of the KU Leuven Institute for Sustainable Metals and Minerals. In a new documentary, Made in Europe: from mine to electric vehicle, the scientist warns that Europe is ‘sleepwalking towards the abyss’ unless the old continent takes more control over the entire supply chains of green technology, such as electric cars, in times of ‘resource nationalism’. ‘
According to Jones, that may be possible, but the challenge is enormous. It will require not only a more coherent European strategy for its industry, but also a change in mentality among citizens, who now want ‘Teslas, but not mining’, says Jones. Those critical metals and minerals, such as lithium, rare earth metals or copper, are more abundant in European soil than is generally known, but are now almost exclusively imported. We will not make it through recycling alone, because all these materials (with the exception of copper) are only now entering the cycle for the first time.
For rare earth metals such as neodymium, which is also used in magnets for wind turbines, Europe could become fully autonomous, says Jones, who visited Kiruna, Sweden, where one of the largest reserves of rare earth metals was discovered early this year. “And the Solvay plant in La Rochelle has the capacity to refine them ourselves,” says Jones. ‘But today we are completely dependent on those rare earth metals (98 percent, ed.) of China.’
Corruption and protest
Europe will not be able to extract all the metals it needs, such as copper or cobalt, but it will be able to extract lithium – what Jones calls ‘the poster boy of the energy transition’, and for which demand in 2040 would be around 42 times higher than in 2040. 2020, according to the International Energy Agency. “There are 27 known lithium deposits in Europe, of which at least a dozen could be exploited commercially, including in Portugal, Spain, France, Austria, Serbia and Finland,” says Jones. ‘But nowhere in Europe is there a lithium mine in production yet.’
One of the most advanced projects, a mine in Portugal, was discredited last week in a corruption case, which also forced Prime Minister António Costa to resign. Elsewhere, such as in Serbia, mines are encountering fierce resistance. In Kiruna, which suffers from landslides due to mining, residents also experience that mining also causes nuisance. “But at the same time they realize that it is necessary,” says Jones, who realizes that a real change in mentality will be necessary in some places: “In Flanders, even a Umicore battery recycling project is not permitted.”
According to him, Europe can also limit its environmental impact through stricter standards and technological knowledge. Jones speaks of ‘fair metals‘, by analogy with fair trade chocolate or coffee. The downside of this is that the cost is higher than in countries where environmental legislation is weaker or even non-existent. To tackle unfair competition, the EU could set up a kind of border tax for transition metals, as Brussels did with the carbon adjustment mechanism (CBAM) for carbon-intensive industries.
The fact that Chinese companies such as BYD, Zeekr, Xpeng and Nio can today produce electric cars up to 40 percent cheaper than European rivals is partly due to their less strict standards and cheaper labor. But also because the country controls the entire production chain. This also makes its industry more resistant to price shocks in raw materials.
Europe must learn from this, Jones believes, and urgently needs an integrated long-term strategy for the transition to a low-carbon industry. Because what applies to electric cars applies to all green technology. Without a strategy, greening will go ‘hand in hand’ with ‘de-industrialisation’, says Jones. It’s halftime and we’re 2-0 down against China. “If we wait another five years, it’s game over.”
The documentary Made in Europe: from mine to electric vehicle will be presented in preview at KU Leuven on Monday.