Lithium from hard rock for batteries and rare earths for magnets and motors underscore main Asian competitor’s dominance
Since the car was invented in Europe 136 years ago, the industry has grown to become one of the foundations of the continent’s economic growth and prosperity.
The EU has big ambitions for EVs, aiming to phase out sales of new petrol and diesel-powered cars by 2035. This month, the bloc’s leaders said they plan critical raw materials’ legislation to fund strategic projects and build stockpiles. Vulcan — in which Stellantis, the carmaker formed by the merger of Jeep owner Fiat Chrysler and Peugeot owner PSA, has invested €50mn — illustrates the challenge. Lithium is dug up from hard rock in Australia and processed in China, or slowly evaporated from brines in Chile. Vulcan wants to start producing lithium in Germany from 2025 with a new, unproven technology, which pumps up brine and extracts lithium directly using geothermal energy.
Europe’s auto sector also faces challenges in establishing a supply chain for electric motors, the second most valuable part of EVs. These need highly specialised permanent magnets that use, a collection of 17 elements that are extremely difficult to extract and process. China dominates the production and processing of rare earths, with an estimated 80 per cent global market share.