2023-08-10 10:50:31
In recent months, the insurer Allianz Trade has released 2 rather worrying reports concerning the future of the European automotive industry. Last May, Johan Geeroms, Risk Underwriting Director Allianz Benelux, declared: “15 years ago, the Chinese government had already fully invested in BEVs (battery electric vehicles, editor’s note). Large public companies have been created and these are now arriving in force on the European market. The three best-selling battery cars in 2022 are Chinese. Soon, all cars will come from China, whether they are made by a Chinese brand or whether they are American or European brands and made on Chinese soil. They meet all European requirements. »
This Chinese rise is a huge blow for the European economy as a whole because, while until recently Europe was the world’s largest exporter of cars, today China has taken its place.
A worrying addiction
More recently, in a report released in early August, Allianz Trade expressed concern about Chinese control over the critical materials needed to manufacture batteries: “China dominates the field of essential raw materials, controlling almost all rare earths, 91 % of magnesium and 76% of silicon supplies in the world. Similarly, the Democratic Republic of Congo holds more than 60% of the world cobalt market, South Africa 71% of platinum and Russia 40% of palladium. Should these mineral-rich countries decide to form an Organization of Metal Exporting Countries, it could manipulate prices, disrupt supply and further restrict international trade, posing risks for countries heavily dependent on imports, including the United States. EU, Japan and South Korea. »
How to stop this Chinese progression? Johan Geeroms: “Then you have to look at the commercial conditions. Policy makers should also strive to maintain assembly within the EU. Furthermore, it is important that the EU invests substantially in battery technology and produces lithium for its own use. »
So, yes, Europe has put in place a law on critical materials in order to guarantee a stable supply of raw materials, but it may already be too late… Moreover, by imposing all-electric (or almost ) in 2035, Europe may well be shooting itself in the foot because, without rapid change, its industry will not grow from it…
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