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The electric car scam. Raw materials for batteries have risen by 870%.

The European Court of Auditors warns that the Green Deal targets in the transport sector risk not being met. The main problem is access to the raw materials for making the batteries, which are imported from China, Australia, South Africa, Gabon and Congo, some of which are up to 870% more expensive. Although Europe has more mineral reserves, the time from discovery to production is at least 12-16 years, making it impossible for it to respond quickly to rising demand, the institution says.

Stopping the production of diesel and gasoline cars from 2035 is a totally unrealistic target or rather a sharp drift by the European Commission. The European Court of Auditors itself has been quite harsh on EU policy makers, drawing attention to the insurmountable problems in the electric car sector.

“The EU risks falling behind in its efforts to become a global battery powerhouse as access to raw materials remains a major impediment, along with rising costs and fierce global competition. As a result, the EU’s efforts to develop its battery production capacity may not be sufficient to meet growing demand, which means the EU risks missing its 2035 target of reaching zero emissions,” says a report published by the European Court of Auditors. It showed that the battery industry in Europe lagged behind its global competitors, notably China, which accounts for 76% of global production capacity. “The EU is betting big on batteries. But they may not have a good hand, in terms of access to raw materials, attractiveness to investors and cost. The EU must not end up in a position of dependency, as happened with natural gas, its economic sovereignty is at stake,” said Annemie Turtelboom, a member of the European Court of Auditors, who also led the audit in this sector.

Everything comes from abroad

The EU is particularly dependent on imports of raw materials, especially from a few countries with which it has no trade agreements, the European Court of Auditors report adds. Thus, 87% of EU imports of crude lithium come from Australia, 80% of manganese imports come from South Africa and Gabon, 68% of crude cobalt imports come from the Democratic Republic of Congo and 40% of crude natural graphite imports come from China. At the same time, although Europe has more mineral reserves, the time from discovery to production is at least 12-16 years, making it impossible for it to respond quickly to rising demand. “However, current contractual arrangements generally only provide raw material supplies for two to three years of production at term. In March this year, the European Commission put forward a proposal for an act on critical raw materials in response to this situation. Moreover, the competitiveness of EU battery production could be jeopardized by rising raw material and energy prices. At the end of 2020, the cost of a battery pack (€200/kWh) was more than double the planned target value. In the last two years, the price of nickel has risen by more than 70% and lithium by 870%,” say the auditors of the European Court of Auditors.

Only two scenarios

Overall, the European Court of Auditors concluded that there are only two possible worst-case scenarios if EU battery production capacity does not grow as expected. In the first scenario, the EU may have to postpone the ban on the sale of internal combustion engine vehicles beyond 2035, thus failing to meet its carbon neutrality targets. In the second scenario, the EU would have no choice but to rely heavily on batteries and electric vehicles manufactured outside the EU, to the detriment of the European car industry and its workforce, in order to achieve a zero-emission fleet by 2035.

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