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The hidden weakness in Europes economy · INSIGHT TODAY

• 0:00
  Speaker 1: We are at one of the key sites in Europe's
• 0:03
  Speaker 1: race against China when it comes to technology. This has
• 0:07
  Speaker 1: been Europe's economic weak spot, the EV battery cell. It's
• 0:11
  Speaker 1: the most valuable component of an electric vehicle, and Europe
• 0:15
  Speaker 1: has repeatedly failed at producing it, while China has thrived.
• 0:20
  Speaker 1: Gigafactories like this one of French company Vercor are meant
• 0:23
  Speaker 1: to change that. So the batteries being built here are
• 0:26
  Speaker 1: being built with as little influence from outside of Europe
• 0:30
  Speaker 1: as possible. Europe is pouring over a billion euros of
• 0:34
  Speaker 1: public money into factories like this one. And it's throwing
• 0:37
  Speaker 1: its political weight behind battery makers. The big question is
• 0:41
  Speaker 1: whether it will pay off.
• 0:42
  Speaker 2: In the end.
• 0:44
  Speaker 1: Growing its own battery industry is key for the future
• 0:47
  Speaker 1: of Europe's economy. Demand for electric vehicles in Europe is growing.
• 0:52
  Speaker 1: Sales were up by 36% during the first half of
• 0:55
  Speaker 1: this year compared to last, in part because of rising
• 0:58
  Speaker 1: gas prices caused by the war in Iran. That's good
• 1:03
  Speaker 1: news for Europe's green energy transition, and it can be
• 1:06
  Speaker 1: a big economic opportunity for its car industry. But so far,
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  Speaker 1: Europe is buying practically all of its EV batteries from
• 1:15
  Speaker 1: Asian companies, with China's share steadily increasing. There are many
• 1:20
  Speaker 1: battery factories inside Europe, but virtually all of them are
• 1:24
  Speaker 1: run by foreign companies. What's more, the critical raw material,
• 1:30
  Speaker 1: so the ingredients needed to produce batteries, are imported from
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  Speaker 1: China as well. Korea and China began producing batteries long
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  Speaker 1: before Europe did. In China, the industry has also benefited
• 1:43
  Speaker 1: from subsidies on a scale unmatched elsewhere. The result? Asian
• 1:47
  Speaker 1: battery manufacturing is often more advanced and cheaper. Producing batteries
• 1:52
  Speaker 1: in European factories like this one is 90% more expensive
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  Speaker 1: than in China right now, according to a recent study.
• 2:00
  Speaker 1: But why bother making them in Europe at all? For one,
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  Speaker 1: relying on China is risky.
• 2:05
  Speaker 3: Simply being so dependent on this makes it easy for
• 2:10
  Speaker 3: China to weaponize it.
• 2:11
  Speaker 1: Alexander Lipke researches Europe's battery cooperation with Asia.
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  Speaker 3: The battery supply chain is very much in the focus
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  Speaker 3: of the Chinese leadership when it comes to its leverage
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  Speaker 3: points and its cards that it thinks it has in
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  Speaker 3: the looming trade confrontation with the EU and with Europe.
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  Speaker 1: Last year, China imposed export controls on its critical raw
• 2:33
  Speaker 1: materials as part of its trade dispute with the United States.
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  Speaker 1: The move put Europe's car production at risk in particular.
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  Speaker 1: And there's another reason. By buying the most valuable part
• 2:46
  Speaker 1: of electric cars from abroad, Europe is missing out on
• 2:49
  Speaker 1: an opportunity to boost its own industry. That's why the
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  Speaker 1: European Union is pushing for more European battery makers.
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  Speaker 2: Europe must be in control of the critical technologies that
• 3:02
  Speaker 2: will shape the economy of tomorrow.
• 3:04
  Speaker 1: To help Europe's battery makers catch up to cheap Chinese competition,
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  Speaker 1: the EU recently proposed a plan called Made in Europe.
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  Speaker 3: The idea?
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  Speaker 1: Only EVs with European-made batteries will qualify for subsidies like
• 3:17
  Speaker 1: tax breaks.
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  Speaker 4: The idea and the logic of Buy European is to
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  Speaker 4: try and close this not close the price gap because
• 3:27
  Speaker 4: you want to close it, but to create a different
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  Speaker 4: incentive next to the price incentive for firms to go
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  Speaker 4: for European batteries.
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  Speaker 1: That's what brings us to this battery factory. It kicked
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  Speaker 1: into gear at the end of 2025.
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  Speaker 2: Right now, just in France, there are only three plants
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  Speaker 2: and we are the only one which is fully independent.
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  Speaker 1: If all goes to plan, this factory will make enough
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  Speaker 1: battery cells for up to 300,000 electric vehicles every year. Renault,
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  Speaker 1: which owns a stake in Vercors, has already signed up
• 4:01
  Speaker 1: to buy them for its electric vehicles. The French government
• 4:05
  Speaker 1: invested 750 million euros in subsidies in Vercors, according to
• 4:10
  Speaker 1: the company. But so far, Vercors hasn't passed the biggest hurdle,
• 4:14
  Speaker 1: mass production. Just one of four factory lines here are
• 4:18
  Speaker 1: up and running at the moment. Vercoe wants to ramp
• 4:21
  Speaker 1: up production by the end of the year. Being in
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  Speaker 1: this state-of-the-art factory, you can really see the massive amounts
• 4:29
  Speaker 1: of investments that are going into this project. And the
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  Speaker 1: big question is whether it will pay off in the end.
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  Speaker 1: So far, Europe has a bad track record when it
• 4:41
  Speaker 1: comes to batteries. Many of its attempts to make them
• 4:44
  Speaker 1: have failed. The most prominent example, Swedish company Northvolt. It
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  Speaker 1: was one of the world's most valuable battery startups, raising
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  Speaker 1: around $ 13 billion. In 2025, it went bankrupt. Because of
• 4:57
  Speaker 1: a host of problems, one of them, Northvolt reportedly relied
• 5:01
  Speaker 1: too much on machines and experts from China to function
• 5:05
  Speaker 1: on its own. Another reason, these are precision products. Mass-producing
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  Speaker 1: them at high quality is hard.
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  Speaker 5: The challenge is ramping that up to kind of full
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  Speaker 5: capacities at the site.
• 5:16
  Speaker 1: Ben McWilliams specializes in EU energy policy.
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  Speaker 5: That's what Chinese companies have been so good at, is
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  Speaker 5: ramping up and kind of reducing or minimizing failure rates,
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  Speaker 5: basically being very good at making battery cells in an
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  Speaker 5: efficient manner.
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  Speaker 1: To get its factory running at full speed, Werker also
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  Speaker 1: has to rely on support from outside Europe.
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  Speaker 2: We know the difficulty of the battery industry is the start,
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  Speaker 2: is the ramp up. And this is mainly due to
• 5:45
  Speaker 2: the complexity of the process. We have hired an experienced
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  Speaker 2: person who already has the experience of launching a Gigafactory.
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  Speaker 2: Most of them are Asian because they already worked in
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  Speaker 2: a Gigafactory in the past. And we use their experience
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  Speaker 2: to be as fast as possible.
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  Speaker 1: But there is another hurdle in Europe's battery race against China.
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  Speaker 1: Remember this graphic? Making batteries at home is one thing.
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  Speaker 1: Getting the materials to make them is another.
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  Speaker 3: What's this powder?
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  Speaker 2: It's a graphite. Okay.
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  Speaker 1: And who's the supplier?
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  Speaker 2: Asian supplier.
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  Speaker 1: This graphite is just one of many materials Europe gets
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  Speaker 1: from Asia. Take this for example.
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  Speaker 3: Lithium.
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  Speaker 1: It's the core component of any battery. Underneath this old
• 6:40
  Speaker 1: mine in central France lies a lithium reserve. According to Emeris,
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  Speaker 1: the minerals group that owns it, it's Europe's biggest and
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  Speaker 1: the fourth biggest in the world. But even though Europe
• 6:51
  Speaker 1: has its own lithium reserves, it currently produces next to
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  Speaker 1: none of it. Most of the lithium is mined in
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  Speaker 1: Australia and Chile, then sent to China to be purified.
• 7:02
  Speaker 1: Now Europe is pushing for more independence. For more than
• 7:06
  Speaker 1: a century, this mine has produced kaolin, a white clay.
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  Speaker 1: Soon it could be producing lithium for Europe's battery industry.
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  Speaker 1: This little hole to explore the rock that's laying underground
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  Speaker 1: here is just the beginning of what's supposed to turn
• 7:21
  Speaker 1: into one of Europe's biggest lithium mines. Loic runs the
• 7:25
  Speaker 1: operations for Imerys. So this is what's underneath.
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  Speaker 3: Us right now?
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  Speaker 6: Exactly, this is a... a piece of the deposit.
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  Speaker 1: So where's the lithium here? Because all I see is rock.
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  Speaker 6: So this is a granite, right? So granite is composed
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  Speaker 6: mainly about three elements. There are shiny flakes or what
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  Speaker 6: we call mica. And there are different kinds of mica.
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  Speaker 6: And this one is lipidolite mica. And this one contains lithium. Today,
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  Speaker 6: only Chinese are refining lipidolite mica. But, you know, it's
• 7:55
  Speaker 6: not rocket science. And we can rely on the strong
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  Speaker 6: skills in Europe, in France to do that.
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  Speaker 1: By 2030, Europe wants to cover 10% of its own
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  Speaker 1: needs for critical raw materials from inside the continent, up
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  Speaker 1: from basically 0% now. It wants to expedite the paperwork
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  Speaker 1: needed to get projects like this off the ground. French
• 8:18
  Speaker 1: President Emmanuel Macron inaugurated the mine earlier this year. But
• 8:23
  Speaker 1: projects like this one are controversial. In different parts of Europe,
• 8:27
  Speaker 1: people living near proposed lithium mines have taken to the streets.
• 8:31
  Speaker 1: Many worry about the environmental risks. Mining projects in Serbia
• 8:36
  Speaker 1: and Portugal have been put on hold because of backlash.
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  Speaker 1: Like any large-scale mining operation, lithium extraction comes with costs.
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  Speaker 1: It can require large amounts of water and carries a
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  Speaker 1: risk of pollution if mining waste isn't managed properly. And
• 8:52
  Speaker 1: there's another problem. Cash.
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  Speaker 3: Cash.
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  Speaker 1: To start mining and refining lithium here in France by 2030,
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  Speaker 1: Emery says it needs more money.
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  Speaker 6: 2030 is tomorrow. It's going to be a huge challenge,
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  Speaker 6: technically speaking.
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  Speaker 1: Until now, only the French state has invested 50 million euros.
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  Speaker 1: But the mine is still looking for private investment.
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  Speaker 5: To be frank, these are not super attractive investments. China
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  Speaker 5: has been very successful at building these out. They're hard
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  Speaker 5: things to build there. enormous facilities, energy intensive, capital intensive.
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  Speaker 5: It's very hard to get these things right and do
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  Speaker 5: them properly. And they require basically a lot of foresight
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  Speaker 5: about the future. They require a large upfront investment today
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  Speaker 5: and kind of knowing what future demand looks like for
• 9:39
  Speaker 5: your product.
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  Speaker 1: Visiting the key sites in Europe's push to catch up
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  Speaker 1: to China on batteries, a complicated picture emerges. The EU
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  Speaker 1: is pushing for independence from China and European companies are
• 9:53
  Speaker 1: trying to make it happen.
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  Speaker 5: So European companies have proven they can do this. They've
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  Speaker 5: built facilities. They're making battery cells as we speak. The
• 9:59
  Speaker 5: challenge is ramping that up to kind of full capacities
• 10:02
  Speaker 5: at the site, which is hard.
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  Speaker 1: But with over a decade of development to catch up on,
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  Speaker 1: and with less money than Chinese companies at their disposal,
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  Speaker 1: European firms face an uphill battle.
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  Speaker 5: The idea that Europe breaks itself off from Asia and
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  Speaker 5: decides to build an own domestic battery industry is pretty
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  Speaker 5: much just not plausible.
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  Speaker 1: Full autonomy might be an unrealistic goal. But if battery
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  Speaker 1: factories like this one make it past the start, Europe
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  Speaker 1: has a shot at producing its own batteries at scale
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  Speaker 1: and growing an industry that doesn't completely rely on the
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  Speaker 1: outside world.