The European Union (EU) is making efforts to increase the adoption of electric vehicles and establish itself as a battery powerhouse, but internal criticism has emerged that it is actually falling behind in the global competition.
The European Court of Auditors (ECA), the EU's financial watchdog, stated in a related report published on the 19th (local time) that "battery manufacturers may abandon the EU market in favor of other regions, such as the United States, which offer large-scale incentives."
As part of its plan to achieve carbon neutrality, the EU intends to completely ban the sale of internal combustion engine vehicles starting in 2035. As of 2021, one in five vehicles registered within the EU was equipped with an electric charging plug. By 2030, the number of electric vehicles within the EU is expected to increase to approximately 30 million.
However, the report pointed out that the EU has not prepared adequate measures to meet the growing demand for batteries.
The high dependence on imported raw materials was also identified as a risk factor that undermines competitiveness in the electric vehicle market. The report stated that the EU heavily relies on raw materials imported mainly from countries with which it has no trade agreements. According to the report, the EU depends on Australia, South Africa, and Gabon for 87% of its lithium and 80% of its manganese, respectively. For natural graphite, dependence on China reaches 40%.
The report expressed concern that "although there are several mineral deposits within the EU, it takes at least 12 to 16 years from exploration to production, making it impossible to respond quickly to increased demand."
The sharp rise in global raw material prices is also a problem. Over the past two years, nickel prices have surged by 70%, and lithium prices have skyrocketed by as much as 870%.
The European Commission's insufficient administrative capacity was also cited as a factor undermining competitiveness in the electric vehicle market. Currently, within the EU, there are cases where subsidies related to the electric vehicle industry overlap among member states.
The report warned that if efforts to expand battery production capacity fail, "in the worst case, the planned ban on the sale of internal combustion engine vehicles starting in 2035 could be postponed, resulting in failure to achieve carbon neutrality goals."
It also added that to meet the 2035 deadline for banning internal combustion engine vehicle sales, the EU might end up heavily relying on batteries or electric vehicles produced outside the EU.
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