The European Union has announced the beneficiaries of a new 2.9 billion euros ($ 3.5 billion) fund to support battery production projects for electric vehicles and Tesla, BMW, FCA are among the main beneficiaries.
European battery innovation
The program is called ‘European Battery Innovation’ and is led by the EU Commission as a ‘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 provide € 2.9 billion ($ 3.5 billion) in financing in the coming years for several projects, which will then be supported by another € 9 billion in private investments.
Projects must meet certain conditions:
- The project contributes to a common goal supporting a strategic value chain for Europe’s future, in particular with regard to clean, low-emission mobility.
- The project is highly ambitious as it aims to develop technologies and processes that go beyond current technology and will allow for major improvements in performance, safety and environmental impact.
- The project also involves significant technological and financial risks, and public support is therefore needed to provide incentives for companies to make the investment.
- Aid to individual companies is limited to what is necessary, proportionate and does not unduly distort competition. In particular, the Commission has verified that the maximum total aid amounts envisaged are in line with the eligible costs of the projects and their funding gaps. In addition, if the large projects covered by the IPCEI are very successful, generating additional net revenue, companies will return part of the aid received to the respective Member States (claw mechanism)
- The results of the project will be widely shared by the participating companies that benefit from public support with the European scientific community and industry, in addition to the participating companies and countries. As a result, positive side effects will be generated across Europe.
Tesla, BMW, FCA among the main beneficiaries
The commission has already approved projects from 42 companies to receive money from the fund.
Although they provided a list of beneficiaries, they did not release the actual amounts being released for each company.
The projects are divided into 4 categories: Raw and advanced materials, Battery cells, Battery systems and Recycling and sustainability.
Tesla was approved in 3 categories:
Tesla is planning to produce its new 4680 battery cell at Gigafactory Berlin, where it also plans to produce the Model Y and other vehicles.
FCA and BMW were approved in two categories.
Other well-known names in the EV market, such as NorthVolt and Rimac, have also been approved and will receive funds to help them build batteries for electric cars in Europe.
Actual fund allocations are expected to be released at a later date.
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