France is ready for battery production

Last July, French President Emmanuel Macron witnessed the unveiling of a new generation of solid-state batteries for electric vehicles from ProLogium. The President was most impressed by the durability of the technology, expressed his support for it and promised to make it as easy as possible to bring it to his country. Ten months later, Dunkerque in northern France was chosen as the site for ProLogium's giga battery factory. This expansion is part of a plan to turn Dunkerque, which is coal-centric, into a hub for the electric vehicle battery industry. By attracting a number of battery manufacturers, including Chinese company Envision AESC, local start-up Verkor and the ACC consortium made up of Mercedes and Stellantis, France aims to create jobs and take a leading role in Europe's energy transformation.

The French government has provided the new companies with favourable conditions in the form of generous subsidies, relaxed EU rules and support for green energy projects, as well as reductions in production and corporate taxes. France wants to maintain its competitiveness in the field of green vehicles and gain control of its supply chains. At the same time, it wants to remain attractive because of the US Inflation Reduction Act, which could take away potential investors. Germany is making similar strides in attracting new electric battery manufacturers and is doing even better than France.

Europe makes ground for Chinese battery companies

Europe is accepting new bids to build plants while attracting investors to ease the complexity of supply chains from China. Plants targeting production in the electric vehicle sector are planned within Europe, such as Chinese company Envision's Sunderland, UK, site, which is expected to start operations in 2025 with a production capacity of 12 gigawatt hours. Other plants are planned by the company in Douai, France, with an investment of more than 2 billion euros in a gigafactory called Renault ElectriCity, as well as in Portugal near the city of Navalmoral de la Mata. CATL will open a plant near Erfurt, Germany, with a capacity of between 8 and 14 gigawatt hours, and another in Debrecen, Hungary, with an investment of almost €7.3 billion. The Chinese company EVE Power will also be added to the Debrecen industrial portfolio with a capacity of 28 gigawatt hours and an investment of €1 billion. The Chinese company Svolt will invest €2 billion in two plants in Uberherrne, which started operations at the end of this year and have a capacity of 24 gigawatt hours. A China Aviation Lithium Battery Technology plant will soon be built in Portugal. All these investment plans are an indication that China would like to link its market with Europe and build a stable supply system, together with a place for the sustainable development of electric transport.

China unveils US$72 billion tax breaks

One of the most active electric vehicle markets has introduced tax breaks worth 520 billion yuan (about US$72.3 billion) as part of its efforts to switch to electric transport. The country's commitment is linked to the growing number of electric vehicles on its roads, increasing availability and interest in electric propulsion. The country sees a slowing trend and a gradual decline in its market potential, so it is putting in place steps to continue to support the growth of EV sales and interest from global companies to expand their operations in China. The package being unveiled includes tax breaks on the purchase of new energy vehicles purchased in 2024 and 2025. The purchase tax exemption and its extension will be gradually reduced for vehicles purchased in 2026 and 2027. The government's measures are therefore aimed at stimulating growth in the EV sector and supporting domestic market players such as Nio, Xpeng and Li Auto, as well as competitors such as Tesla and BYD. This is great news for new energy vehicles, moreover, they have been exceeding market expectations recently and government support should help them significantly in their upward trend*[1].

Great Wall Motor and BYD

The two big Chinese companies, which are among the leading carmakers, are at loggerheads with each other over escalating competition. Great Wall Motors has claimed that BYD's plug-in hybrid models do not have to meet environmental standards as they use conventional fuel tanks instead of pressurised ones. As part of the statement, the matter was referred to China's Ministry of Ecology and Environment. BYD disputes and claims that their vehicles meet all the required criteria and have been certified by the government, with no fear of scrutiny from the authorities. Because of these disputes, there has been a drop in the share value of both companies, which has created room for foreign competitors to carve out a little more investment space in the Chinese market.* On the other hand, this dispute is a sign that both companies are trying to outdo each other in the quality of their products, and an indication that they are succeeding in pushing the boundaries. Chinese manufacturers in the Chinese market have a high potential to become powerful and stable plants in the current global EV trend.

BYD's stock performance over the past five years. (Source: Google)*

Great Wall Motors' stock performance over the past five years. (Source: Google)*

Toyota is revolutionizing electric vehicles

Toyota, the world's leading automaker, has announced ambitious plans for electric vehicle technology. Using lithium-ion and more affordable lithium-iron phosphate batteries, it wants to create more affordable vehicles with an impressive range of 1,000 km, with a full charge achieved in just 10 minutes. This breakthrough in battery technology represents a significant opportunity for Toyota to compete with Tesla, whose Model Y is currently the world's best-selling electric car. The development of technologies from different manufacturers will bring more competition to the market and the path to global electric-powered transportation will become even faster over time.

Matúš Mahút, Analyst at InvestaGO

*Minute performance is no guarantee of future results.

[1] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or on the current economic environment, which may change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.