China's Rising Influence on EV Raw Materials
Jean-Dominique Senard, Renault's Chairman, shared with Reuters on Saturday that the "Chinese storm" is imminent for the expanding EV industry in Europe. This metaphor refers to China's overpowering hold over the key raw materials that fuel the production of zero-emission vehicles.
Export Restrictions Trigger European Concerns
China's latest action to limit the exports of two essential metals, gallium and germanium, used in semiconductors and EVs, should serve as an alarming signal for European policymakers. Senard emphasized in an interview that this development highlights Europe's heavy dependence on China and the necessity to establish an expensive supply chain.
Increasing Pressure from Chinese EV Imports
"By a Chinese storm, I'm implying the intense strain today owing to Chinese vehicle imports into Europe," explained Senard. He pointed out that while Europe can produce electric vehicles, there's an ongoing struggle to secure supply safety. China's established EV industry and raw material supply chain, built over years of investments, would take billions of euros to duplicate.
Europe at the Crossroads Amid Tech War
As China's export restrictions escalate the technology feud with the United States, it poses potential disruptions to global supply chains. Europe finds itself caught in the crossfire, prompting it to explore alternatives in worst-case scenarios. "If a severe geopolitical crisis ensues, the destruction to battery factories reliant solely on imported products will be substantial," Senard cautioned.
The Importance of Developing Alternative Fuels
Senard also discussed the crucial role of developing alternative fuels like synthetic e-fuels and hydrogen in case a sudden shortage of batteries arises due to the scarcity of raw materials. "As any prudent manufacturer would do... we're seeking alternatives to prevent the country from coming to a standstill if, for instance, we run out of batteries," he concluded.