The battle for Europe’s 21st century automotive market is underway.
France’s leading oil producer, Total SA, is set to become Europe’s fourth largest lithium ion battery producer for electric vehicles (EV) after agreeing a multi-billion euro deal to make 48GWh of cells by 2030.
The €5bn mega-project, involves the construction of two 24GWh lithium ion battery megafactories, and is confirmation that Total doubling down in its 2015 acquisition of specialist battery maker, Saft, in this joint-venture with PSA Group creating the new company, Automotive Cell Company (ACC).
PSA is the world’s tenth largest car producer and is presently undergoing a merger with Fiat Chrysler Automobiles (FCA) to make the world’s fourth largest auto group. Last year, both producers combined made 8.7m vehicles.
The move is France’s EV supply chain response to Germany’s VW Group teaming up with Northvolt for Northvolt Zwei*, a battery megafactory in Saltzgitter, Germany (*Keynote at Battery Megafactories Europe 2020), and even bigger European plans from China’s battery champion, Contemporary Amperex Technology Co. Limited (CATL), and South Korean heavyweight, LG Chem.
“The blueprint is now being laid for future of Europe’s auto market and the battle for EV market share is crystallising between Germany, France, China and South Korea,” Simon Moores, Managing Director, Benchmark Mineral Intelligence explained.
“France’s response brings together three of its biggest and most important companies from the oil, lithium ion batteries and automotive worlds. This unique collision of industries and disciplines is just the start of the energy storage revolution that we have discussed for so long”, he added.
Europe’s fourth largest battery maker
If Total’s battery project executes to plan, it will make the oil producer Europe’s fourth largest lithium ion battery maker by 2030 behind CATL, LG Chem and Sweden’s Northvolt.
Total is building out its battery capacity in three phases.
Phase 1 will see the construction of a €200m R&D pilot plant at Saft’s Nersac location near Bordeaux, France.
The second phase will see this grow to a functional 8GWh EV battery megafactory in Hauts-de-France region of the country close to the border with Belgium.
This megafactory will be operational by 2023, Total say, and then be expected to expand to 24GWh by end-2027, Benchmark Minerals anticipates.
Once Total and Saft are confident their new battery megafactory works at scale and that demand is continuing for pure EVs within Europe, the alliance will then start construction on a second, replica battery megafactory in Germany at the full operating capacity of 24GWh by end-2030 bringing the group’s total capacity to 48GWh.
While the plan sounds ambitious, much more battery capacity is likely to be needed.
More battery capacity needed for PSA-FCA Group
“The commitment is a big positive for Europe’s EV space. However, while €5bn and 48GWh of battery capacity sounds like a lot, it will likely only scratch the surface of PSA-FCA’s future needs,” explained Caspar Rawles, Head of Price Assessments at Benchmark Minerals.
“48GWh can only produce 870,000 pure EVs with a battery pack size of 55GWh or 10% of the vehicles that PSA-FCA produced last year.”
“If this was a plan for 2025 it would be in- line with our own expectations, but as this is a plan for a post-2030 world, we anticipate this to be too conservative and more capacity will be needed.”
In comparison, Benchmark Minerals expects China’s CATL to have a European battery capacity of 80GWh by 2030 from its Erfurt megafactory in Germany – the largest on the continent – while South Korea’s LG Chem will be close behind at 70GWh from its Wroclaw, Poland plant and Northvolt is forecast to have 52GWh total capacity.
Benchmark Minerals’ Lithium ion Battery Megafactory Assessment – a database of the world’s lithium ion battery plants analysed on monthly cycles – expects Europe to have 16 megfactories by 2030 and a total capacity of 372.5GWh (January 2020 Assessment).
The new capacity from Total-Saft and PSA project will take this total to 420.5GWh.
“With this new potential capacity, Total, Saft and PSA are on track to have 11.4% of Europe’s total EV lithium ion battery capacity by 2030 as of today. However, the trend is up and we expect Europe’s pipeline battery capacity to significantly increase – most likely double – in the next 18 months,” Rawles added.
Battery Megafactories Europe 2020
Location: The Westin Grand, 17-18 June 2020, Berlin, Germany.
Brief: Join the world’s first commercial conference on the scaling of super-sized lithium ion battery plants. Hear from Tesla, Northvolt – VW Group, Fluence (Siemens – AES), and more together with lithium, cobalt, anode and cathode makers.