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International News From the Field: Europe

A cocktail of risks threatens Europe’s growth: the war in Ukraine, the energy crisis, the tightening of interest rates, and high inflation. Despite these challenges, there is cautious optimism for 2023. For more industry intel and other tidbits, read on.
Jan 25, 2023

The world is going through important changes and challenges, such as the energy and digital transition, witha solid commitment to sustainability. This environment is driving significant investments in research, development, innovation, and equipment to adapt factories to a new, coming reality.

The European Union has focused on sustainability through its Green Deal, a mandatory priority for many companies, especially in the automotive sector.

The growth of the European electric vehicle market is expected to surpass China soon, while companies are already investing in related technologies, mainly batteries.

The future of sustainability in production is also a highlight of EMO 2023.

A few recently announced projects and investment news items are listed below:

  • In Davos, Chile-based mining company Ensorcia announced the construction of a lithium treatmentplant in Europe to manufacture batteries, with an initial investment of $200 million and the creation ofmore than 100 jobs. The plant should start operations in 2025, with an installed capacity of 20,000tons of lithium carbon equivalent (LCE) per year and a production capacity of 40,000 tons.

  • BMW will begin production of a solid-state battery prototype in the first half of 2023 to develop battery cells large enough to be tested in vehicles before 2025. Under an expanded joint development agreement, BMW Group and Solid Power have added a research and development license as a basis for their common next steps. This license enables BMW to establish an all-solid-state battery (ASSB) prototype line in its cell manufacturing competence center (CMCC) in Parsdorf near Munich.

  • BMW will invest $2 billion in its factory in Debrecen, Hungary, until 2025. The plant, parallel to producing vehicles, will also assemble batteries for the models of the new generation. The initial investment planned in the factory was $1 billion, but this amount has also been doubled to include the assembly of the batteries.

  • BMW will also invest $800 million between 2020 and 2024 in its Leipzig plant to produce components for electric vehicles. The expansion of the plant is included in the company’s plans for the installation of eight new production lines.

  • Renault – Seven weeks of construction, 38,000 square meters of emptied space, 100 heavy machinery units (robots and assistance equipment), and 400 redeployed workstations. These numbers give some insight into the extent of the challenge of installing the new “alliance standard line” assembly line at Renault’s factory in Douai, France. This transformation is necessary for the historic Renault factory – which once made the Renault 5, Renault 14, Renault 19, Renault 21, Megane, and Scenic – to accommodate the production of the all-new Megane e-tech electric.

  • Record market share increases in Europe were supported by improved standings in all of Hyundai’s G5 markets: Germany, Spain, Italy, France, and the U.K. The previous year's sales in 2022 were up, with a record market share of 4.6% in the EU, EFTA, and KK. Hyundai’s strategy in Europe puts customer-centric development and production first. To cater to European customers, the company makes cars for Europe in Europe. More than 70% of vehicles produced for the European market are produced at Hyundai’s HMMC and HAOS plants in the Czech Republic and Turkey, respectively. In line with its commitment to “progress for humanity” and carbon neutrality, in 2022, HMMC became the company's first factory to purchase 100% renewable energy through renewable energy certificates. At the sustainably powered facility, more than 350,000 vehicles across every powertrain are produced annually.

  • Toyota Motor Europe has announced the start of production of its fifth-generation hybrid powertrains for the new Corolla. The latest Toyota hybrid electric low-emission powertrains will be made at Toyota Motor Manufacturing Poland (TMMP) and Toyota Motor Manufacturing U.K. (TMUK) for the new Corollas manufactured at TMUK and Toyota Motor Manufacturing Turkey (TMMT). The start of production of fifth-generation hybrid engines and transmissions follows the upgrade of seven production lines supported by new investments of $75 million and $540,000 at the plants in Poland and the U.K., respectively.

  • Volkswagen Group will invest $4.5 billion between 2023 and 2026 in the Sagunto, Spain, battery factory, which plans to create 19,100 direct and indirect jobs. The total investment calculated by the Volkswagen Group for its electrification projects in Spain is about $10 billion.

  • ZF Friedrichshafen AG and Wolfspeed Inc. plan to build a $3 billion wafer factory in Saarland, Germany, to make chips for electric vehicles and other applications, a boon for a region dependent on combustion-engine components.

For more information, please contact Conchi Aranguren at caranguren@AMTonline.org.

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Author
Conchi Aranguren
AMT's Representative for Europe
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