A storm originating from China is on the horizon for Europe’s blossoming electric vehicle (EV) sector, Renault’s Chairman Jean-Dominique Senard shared with Reuters this past Saturday. According to Senard, China’s control over essential raw materials used in EV batteries puts Europe in a precarious position.
Senard raised alarms following China’s recent move to limit exports of gallium and germanium—two metals critical in semiconductors and EV production. This restriction exposes Europe’s heavy reliance on China and underscores the necessity to create an expensive, independent supply chain.
Senard explained, “When I talk about a Chinese storm, I’m talking about the strong pressure today related to Chinese (electric) vehicle imports into Europe.”
He stressed the challenge for Europe isn’t about producing EVs but securing the supply chain. He pointed out that China’s impressive EV industry and raw material supply chain are the result of years of substantial investments, which would take billions of euros for Europe to replicate.
The tightening grip on exports from China aggravates an ongoing technological conflict with the U.S., potentially causing more disruption to worldwide supply chains. Stuck in the crossfire, Europe may need to seek alternatives if the situation worsens.
Senard ominously warned, “If there’s a real geopolitical crisis, the damage to battery factories solely powered by products coming from outside will be considerable. That’s the issue.”
He highlighted the crucial role of alternative fuels, such as synthetic e-fuels and hydrogen, especially in a potential scenario of battery shortages due to a lack of raw materials.
In Senard’s own words, “As any careful manufacturer would do… we’re looking for alternatives to avoid paralyzing the country if, for example, we run out of batteries.”
His statement is a clear call-to-action for Europe’s EV industry to reconsider its dependency and foster resilience amidst the brewing ‘Chinese storm.’
Photo courtesy of Reuters.