Talga Group, a mining firm specializing in the materials used to assemble EV batteries, which include rare earth metals as well as minerals like graphite, has launched several projects in Europe recently, including a massive factory to produce anodes for lithium-ion batteries and a potential lithium mine location in Sweden. However, Talga CEO Mark Thompson recently told US media that the industry needs a lot more help if it expects to compete with China’s massive EV market, which has begun a new move to export EVs.
“We’re not seeing the speed and support necessary,” Thompson told a US paper on Friday about EU subsidies. “The problem is there’s funding for the battery factories, but not for what makes the batteries in the factory. So they’ve gone downstream and funded that, with nothing to feed those plants except imported materials from China.”
“I wouldn’t say ‘no’ to some protection for us to be honest. I think if Europe really wanted to clean up batteries and the supply chain, they would actually focus on the graphite and the minerals in the battery. It’s more expensive to operate here,” he continued.
“Our project can compete on a global basis. However, in the last few years, China has been heavily subsidizing the production of synthetic graphite. They’ve been subsidizing the buildings and the products themselves, and that has distorted the market a lot. They have crashed the price of raw materials down to the point where no new projects are getting built in the Western world.”
China has been the world’s largest supplier of rare earth metals for more than 20 years, with 42.3% of all exports in 2018. Despite their name, rare earth metals proliferate in the Earth’s crust, but require highly pollutive methods of extraction and refinement. The materials are necessary for the manufacturing of electronic devices from smartphones to EVs. But as the West has increasingly positioned itself in opposition to China, following Washington’s strategic shift toward “great power competition” with Beijing and Moscow, it has aroused fears that China could use this and other economic “choke points” to ravage Western markets in retaliation for threatening moves made against it, to say nothing of the consequences of war breaking out.
Thus, Western governments have sponsored new domestic factories for microchips and other devices, encouraged firms to move their operations from China or East Asia into the US or Europe, and pushed for new mines and expansion of mines on their home soil.
Chinese EV makers have also made moves into foreign markets, including a deal to build EVs in Saudi Arabia and to export to several Southeast Asian countries.
However, China isn’t the only threat to Europe’s green energy transition plans: American subsidies for its own green industries, including EV manufacturing, have had a distorting effect in Europe as well.
“On top of that, you have subsidies for renewable power and so on. Europe is dwarfed by the numbers we see in the US,” the CEO of Norwegian energy firm Nel told US media earlier this year about the company’s decision to build a new factory for hydrogen fuel cells in the US instead of Europe.
French President Emmanuel Macron has also sharply criticized the US policy, saying that "If Europe does not respond, accelerating the 'greening' of the US economy will mean the deindustrialization of Europe.”
Europe is also under extra pressure to quickly develop its green energy supplies because of its decision to boycott Russian energy exports as retaliation for Russia’s special operation in Ukraine, which aims to de-Nazify Kiev, which sought to be a potential base for NATO weapons. The sudden end of Russian gas, coal, and oil imports has caused prices to spike in Europe, driving mass protests, political shifts, and even deindustrialization as businesses flee the high operation costs.