Much has been said (and I know) about whether or not Spain should manufacture batteries for vehicles. The truth is that it is a business opportunity.

The first step has been taken Estremadura with the announcement of a vertical project that includes the exploitation of a lithium mine, a cathode factory and a cell plant that will involve an investment of 1,000 million euros and 1,615 direct jobs.

The second step was that of the Volkswagen group, when asking the Spanish Government to do everything possible to implement a battery factory to supply the 600,000 electric vehicles in segment B (such as a Seat Arona) that it plans to assemble in Spain at Seat Martorell, and later in Volkswagen Navarra, for all the brands of the German consortium.

These are two real opportunities within a Europe that tries to bet on electromobility as a business opportunity. For this reason, the European Commission launched in 2017 the project of the European Battery Alliance and, according to their estimates, generate a business of 250,000 million euros by the year 2025 and between 3 and 4 million jobs.

But most importantly, reduce the total dependence of Asian countries, especially China, on the production of battery cells.

Battery factory project in Extremadura

In addition, the European Commission in 2021 and in collaboration with the industrial hydrogen acceleration center EGHAC (European Green Hydrogen Acceleration Center) the project Breakthrough Energy, which will mobilize an investment of 1,000 million euros, a generation of 1,200 TWh, half a million jobs and that puts the focus more than on hydrogen itself in the industrial value chain.

This year the European Commission also launched the European Solar Initiative to re-attract photovoltaic operators to the Old Continent, install 20 GWh per year in Europe and generate some 400,000 jobs.

Transport decarbonization

The transport supposes 25% of global CO2 emissions, the challenge to lower the gases emitted is high because, due to the increase in GDP and per capita income, it is expected that the problem is multiplied by three If people per kilometer or merchandise per kilometer moved are taken as parameters, according to the presentation by Mikel Lasa, CEO of KIC InnoEnergy Iberia, one of the coordinating companies of these projects launched by the European Commission, within the Sernauto Virtual Conference entitled “Spain as a manufacturer of batteries and fuel cells”.

Within this 25%, road transport represents 70% of emissions. The expectation is not flattering because if In 2016, 6,081 million tons of CO2 were emitted by these vehicles, in 2030 they will rise to 6,448 million tons due to the increase in travel and commercial activity. Yes, there is a downward estimate for 2050 to 4,199 million tons of CO2.

All this despite the fact that there is an effort to turn towards electrification with different technologies. The problem is that no one dares to predict when or how many electrified vehicles there will be in 2050. Although the International Energy Agency anticipates that for By 2030 65% of vehicles will have electrification globally, a percentage that will be 75% in Europe, including passenger cars and light commercial vehicles. And within these percentages, battery technology will be the dominant one, leaving hydrogen for the transport of large tons of goods and long distances.

According to a Bloomberg study, to 2025 virtually all segments of electric vehicle passenger cars will have equated their production costs to their equivalent internal combustion models. Even in B-segment SUVs from 2023 or 2024.

The price of an electric vehicle is conditioned today by the cost of the battery. According to Bloomberg NEF and assuming that the price per kWh for lithium-ion battery packs was $ 137 ($ 114 at the current rate), it will drop to $ 92 / kWh in 2025, to $ 58 / kWh in 2030; and $ 45 per kWh in 2035.

To take an example of a luxury electric vehicle recently launched on the market, the Mercedes-Benz EQS, which has a range of more than 770 km in WLTP approval, which allows charging 300 kilometers in 15 minutes at a fast charging point.

Mercedes-Benz EQV, Mercedes EQV, electric vans, charging point
Mercedes-Benz EQV, manufactured in Vitoria

But parallel to the batteries also there are projects in Europe such as H2 Green Steel in Sweden, where companies such as Scania, Mercedes-Benz, Ikea, Exxor, InnoEnergy, Stena Metall, Marcegaglio or Kingspan participate. It aims to generate 5 million tons of CO2-free steel. In the automotive industry, the extra cost of having this steel in a car of 30,000 euros is about 50 euros, which is viable and affordable by the end consumer. A project that can be replicated to other raw materials and where hydrogen will play a relevant role in decarbonization.

European Battery Alliance

In Europe to help this decarbonization and transformation of transport, the European Battery Alliance (EBA250 and European Battery Alliance) was launched as we have said, seeking an industrial value chain integrated in electric mobility. Since it was launched in 2017-2018 70 industrial projects have been launched, most located in central and northern Europe. One in Spain and another in Portugal. Southern Europe is now starting to get hooked on this car, although we are clearly behind them.

Norvolth, a Swedish company, is one of the main projects. It already has a factory that produces 2 GWh and in 2022 it will have the 16 GWh plant that has production sold until 2030.

It is an example of how it is acting in Europe. And you have to keep in mind that in 2019 in Europe 60,000 million euros were invested in electromobility, 3.5 times more than the 17,100 million that China invested. In addition, 1,385,000 100% electric vehicles and plug-in hybrids were sold in Europe in 2020, surpassing 1,337,000 in China and 328,000 in the US. With growth in Europe of 137% while in China it was 12% and 4% in the US, according to Transport & Environment.

Europe is starting to get to be the one fast follower of Asian countries. But to accelerate the battery and electric vehicle sector where much development remains, in March there was an interministerial meeting with the presence of several European countries where three lines of action:speed up regularization and standardization that allow to give a competitive advantage to companies established in Europe from the point of view of sustainability and that affect the obtaining of raw materials, recycling or the treatment of emissions during the manufacturing process.

The second line will put the focus on the extraction and treatment of raw materials. Today, most of them come from China, Australia or South America. But in addition, it is the case that their refining is done in China, with which they travel from Latin America to the Asian giant to return to Europe, which is not very efficient in terms of emissions. Europe has to refine these raw materials to make their processing sustainable and economically viable.

And the third line was to create the European Battery Academy to train 800,000 people that it achieves the relocation and training of new employees in these new profiles that the electromobility ecosystem brings with it.

Does Spain have everything to create a battery industry?

Espaa you have a great opportunity in the battery industry. It has raw materials such as rare earths, graphite. But the truth is that its extraction generates social rejection, Administrations have not carried out this type of project for years and their machinery is not greased … But if it is exploited in a sustainable way, it is a business opportunity.

Also Spain has abundant renewable energy and very affordable costs. Last year the PPA (Purchase Price Agreement), that is, an energy purchase price of 35 euros per KWh, which allows attracting modern electro-intensive industries, among which are battery manufacturing.

Spain also has a consolidated automotive industry sector and we already have electrical model awards in the country and even more is expected in the second wave of electric vehicles that arrives from 2025. To this is also added a powerful industry of components both for automobiles and parts for renewable energies, such as wind turbines or solar panels.

Irizar electric bus ie tram to operate in Barcelona.  Electric buses, electric mobility, public transport
Irizar electric bus ie tram to operate in Barcelona.

Espaa It has Spanish companies that already work with battery-powered vehicles in buses, such as Irizar, in automotive components, such as Gestamp, Grupo Antoln or Ficosa among others, or in charging infrastructure such as WallBox, and in railways or stationary applications.

At the same time, there are already established R&D organizations in these fields that, together with the investments in R&D of the companies involved, mean that talent in both engineering and production processes does not migrate and remain in Spain. Without forgetting the European recovery funds that will support the projects that were underway and that they will be able to see the light.

And this opportunity translates into Spain could be the lion’s head in micromobility in Europe, where 15% of all trips under 8 kilometers will be made in an electric vehicle. The electric motorcycle company Silence is one example.


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