By Mathieu Rosemain
AIX-EN-PROVENCE, France (Reuters) – A “Chinese storm” is threatening Europe’s booming electric vehicle (EV) sector, Renault Chairman Jean-Dominique Senard told Reuters on Saturday as the Asian superpower dominates the main raw materials for manufacturing zero-emission car batteries.
China’s recent decision to restrict exports of two metals – gallium and germanium – used in semiconductors and electric vehicles should alert European leaders as it shows the continent’s overreliance on China and the need to build an expensive supply chain, Senard said in an interview.
“When I talk about a Chinese storm, I am talking about the strong pressure today related to imports of Chinese (electric) vehicles in Europe,” Senard said.
“We are capable of manufacturing electric vehicles, but we are struggling to ensure the security of our supplies,” he said, adding that China’s electric vehicle industry and raw material supply chain resulted from years of investments that would cost billions of euros to replicate.
China’s export restrictions are escalating a tech war with the United States, which could further disrupt global supply chains. Europe finds itself in the middle of the feud, forcing it to seek alternatives in the worst case scenario.
“If there is a real geopolitical crisis, the damage to battery factories powered only by products coming from outside will be considerable,” warned Senard. “This is the problem”.
The development of alternative fuels – such as synthetic e-fuels and hydrogen – would be crucial in the event of a sudden shortage of batteries due to a shortage of raw materials, Senard said.
“As any prudent manufacturer would…we are looking for alternatives to avoid crippling the country if, for example, we run out of batteries.”
(Reporting by Mathieu Rosemain; Additional reporting by Gilles Guillaume; Editing by Mark Potter)