Wednesday 25 January 2023

No 249: Green subsidies and electric car batteries

THE European Union could be on its way to self reliance in the production of electric car batteries, but only if it matches the green subsidies of the USA, according to the article below.

Having a thriving battery industry in one's country is seen as a very important medium term goal, both since there will be more and more demand and to ensure that a particular country does not have to rely on others for this. The pitfalls of relying on other countries to supply energy has of course been emphasised by the problems EU nations have had in the past year due to needing Russian gas and oil.

President Biden's recent Inflation Reduction Act has put the USA ahead in the race to develop large scale and cheap battery production. Much of the act's £300 billion of subsidies have been allotted to green technology industries. Other countries may complain that this is an unfair form of protectionism, but the reality is that if they do not match the US subsidies, they will lose the competition in these emerging industries. We already seen a large amount of green FDI funding switch to the USA from other parts of the world.

Meanwhile in Britain, the Britishvolt electric battery mega factory project has collapsed, at least in part due to government refusal to provide emergency funding.

Read about this and more at:

https://www.theguardian.com/business/2023/jan/24/eu-could-end-reliance-on-china-electric-car-batteries-by-2030-investment-joe-biden-369bn-green-subsidies?CMP=Share_AndroidApp_Other

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