Two-thirds of the world’s manufacturing capacity for lithium-ion batteries is based in China, and that is driving car manufacturers around the world to move their plants to that country.
US industry leader Tesla is already building a plant in Shanghai expected to produce 500,000 electric cars a year. Meanwhile, Volkswagen has announced it will invest $12 billion in its electric vehicle manufacturing there, with BMW, Mercedes-Benz and Renault expected to follow at the possible cost of millions of European jobs.
According to Simone Tagliapietra, an energy analyst at a Milan-based think tank, “Europe might well see its carmakers massively moving production to China,” adding “This is a huge risk for the region”.
Building EVs in China makes sense, because that’s not only where the batteries and customers are, it also avoids heavy Chinese tariffs on imported vehicles.
“It just makes sense to produce electric vehicles where batteries are also produced,” Tagliapietra said.