The European Union has announced the beneficiaries of a new 2.9 billion euro ($ 3.5 billion) fund to support battery production projects for electric vehicles, with Tesla, BMW, FCA being one of the biggest beneficiaries.
European battery innovation
The program is called ‘European Battery Innovation’ and is led by the EU Commission as’ ‘Project of Common European Interest’ (‘IPCEI’) with the aim of supporting ‘research and innovation in the battery value chain’. ”
Under the program, they plan to fund € 2.9 billion ($ 3.5 billion) on various projects in the coming years, which will then be supported by another € 9 billion in private investment.
The projects must meet certain conditions:
- The project contributes to a common goal by supporting a strategic value chain for the future of Europe, in particular with regard to beauty and low emission mobility.
- The project is very ambitious, as intended the development of technologies and processes that go beyond current technology and will enable major improvements in performance, safety and environmental impact.
- The project also poses significant technological and financial risks, and public support is therefore needed to provide incentives to businesses to carry out the investment.
- Assistance to individual companies is limited to what is essential, even and not distort the competition unnecessarily. In particular, the Commission verified that the total planned maximum aid amounts are in line with the eligible costs of the projects and their funding gaps. Furthermore, if large projects covered by the IPCEI prove to be very successful and generate extra net income, the enterprises will return some of the aid received to the respective countries (claw mechanism).
- The results of the project will be widely shared by participating enterprises benefiting from public support with the European scientific community and industry outside the participating enterprises and countries. As a result, positive distribution effects will be generated in Europe.
Tesla, BMW, FCA among the best beneficiaries
The commission approved projects from 42 companies to receive money from the fund.
While providing a list of beneficiaries, they did not release the actual amounts released to each company.
The projects are divided into four categories: raw and advanced materials, battery cells, battery systems, and recycling and sustainability.
Tesla is approved in three categories:
Tesla plans to manufacture its new 4680 battery cell at Gigafactory Berlin, where it also plans to manufacture Model Y and other vehicles.
FCA and BMW were both approved in two categories.
Other well-known names in the EV markets, such as NorthVolt and Rimac, have also been approved and will receive funds to help them build batteries for electric cars in Europe.
The actual fund allocations are expected to be announced later.
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