Elisabeth Braw is a senior fellow at the Atlantic Council, the author of the
award-winning “Goodbye Globalization” and a regular columnist for POLITICO.
If there’s one thing we know, it’s that our transition away from fossil fuels
won’t be possible without electric cars (EVs).
Pulling ahead in this field, China has recently been making EVs that are far
cheaper than Western-manufactured ones, and much of it comes down to one humble
yet indispensable component: the battery. But now, thanks to one small town in
Norway, it seems there might yet be hope for Europe, and for a greener future
without risky dependencies on China.
Oh, how the times have changed. Four years ago, Tesla was the world’s largest
all-electric car brand, followed by China’s state-owned SAIC, Volkswagen,
Renault-Nissan-Mitsubishi and BYD ( another Chinese manufacturer). Today, five
of the world’s 10 biggest EV brands are Chinese — and it’s not because buyers
specifically want Chinese cars. It’s simply because they’re cheaper.
Take, for example, BYD’s Dolphin Surf. Available in Europe as of this summer,
these cars start at €22,900. That’s significantly less than Tesla models — and a
couple other Chinese EVs are cheaper still.
One reason for all this is that their batteries — that all-important part of an
EV — cost less. For the past few years, Chinese makers have been switching to
so-called LFP batteries, which are different from the NMC batteries most Western
cars still use. LFP stands for lithium iron phosphate, and batteries made with
these components aren’t just cheaper but last longer, thus making them more
sustainable too. (NMCs still get more usage out of each charge, which makes them
better for longer drives, but that gap is narrowing.)
Given their focus on price, it’s not surprising Chinese brands have so massively
adopted LFP batteries. “[China has] a huge cost advantage through economies of
scale and battery technology. European manufacturers have fallen well behind,”
David Bailey, a professor of business and economics at Birmingham Business
School told the BBC. “Unless they wake up very quickly and catch up, they could
be wiped out.”
But there’s good news for Western EV makers: a renewable-energy company called Å
Energi — a Norwegian hydropower giant — has been thinking ahead precisely along
these lines.
Four years ago, Å Energi teamed up with ABB, Siemens, the Danish pension fund
PKA and the Norwegian investment firm Nysnø to form Morrow Batteries.
Majority-owned by Å Energi, Morrow is based in the picturesque town of Arendal
on Norway’s south coast, and it recently began producing LFP batteries for
energy storage systems — think sun and wind energy that needs to be stored after
being captured in solar panels and wind turbines — as well as for defense
equipment.
If all goes according to plan, Morrow will then expand to vehicles, with plans
to build another three LFP facilities in Arendal before 2029.
Of course, this company won’t be able to match China’s formidable LFP production
on its own — and yet, it exists. It exists because Å Energi dared to commit to
this new technology, because the Norwegian government agreed to grant a loan,
and because the EU decided to support the undertaking too.
Four years ago, Tesla was the world’s largest all-electric car brand, followed
by China’s state-owned SAIC. | Allison Dinner/EPA
To date, the path to EV batteries has been strewn with grand ambition and, alas,
bankruptcies. In the past couple years alone, Northvolt in Sweden and
Britishvolt in the U.K. have both gone bust. But as technical as it may sound,
LFP batteries are the surest way for Europe to reduce its dependence on Chinese
EVs. So, if Morrow succeeds, and is perhaps joined by one or two new European
battery-makers, Europe’s EV manufacturers will be better able to compete with
Chinese rivals. To be viable, the green transition has to be a collective
undertaking.
It’s no surprise that this pioneering LFP factory is located in Norway, as the
country has made EV adoption a priority. In 2023, nine in 10 cars sold in the
country were already EVs, and the Norwegian government wants all newly sold cars
to be zero-emission by the end of this year. Norway doesn’t have any significant
car manufacturers, and unlike most battery-makers, Morrow isn’t owned by a car
manufacturer. But LFP batteries look certain to be the future in all kinds of
applications — and Norway is grabbing that opportunity.
Morrow’s factory, or factories, may lose money at first, but in the long run,
they’ll be a benefit to their owners and to Norway — not to mention Western
consumers. Even more crucially, the arrival of a battery factory in Arendal
points to a fundamental reality: that to do the right thing for our supply
chains and, in many cases, the climate, companies need to team up with
unexpected partners, and occasionally with the government too.
In today’s climate, so to speak, business plans can no longer solely focus on
immediate profit.
Tag - China Looks West
WASHINGTON D.C. — Senior U.S. Republicans attacked the British government for
its decision to cede control of the Chagos Islands, warning the move is a coup
for Chinese interests.
The chairs of both the Senate and House foreign affairs committees warned the
deal, struck Thursday, could put U.S. and U.K. security at risk. The British
government has agreed to hand power over the disputed Indian Ocean archipelago
to Mauritius, which has links with Beijing and struck a free trade agreement
with China in 2021.
Under the terms of the deal, the military base Diego Garcia, used by the U.S.
government to house navy ships and long-range bomber aircraft, will remain in
U.K. and U.S. jurisdiction for at least the next 99 years.
The British government insisted its U.S. allies were foursquare behind the move,
after a report claimed Washington raised concerns about the decision with the
U.K.
But top Republican lawmakers echoed criticism from Conservatives in Britain that
conceding to the long-standing Mauritian campaign for control of the islands
could be a mistake.
Idaho Senator James Risch, a senior member of the Senate Foreign Relations
Committee and a Donald Trump supporter, said the move “gives in to Chinese
lawfare and yields to pressure from unaccountable international institutions
like the International Court of Justice at the expense of U.S. and U.K.
strategic and military interests.”
He added: “The U.S. and our allies must take a long term approach when it comes
to making decisions that affect our strategic competition with China, or we will
all lose.”
Texas Representative Michael McCaul, who chairs the House Foreign Affairs
Committee, said the Diego Garcia base was “essential” to countering China and
co-ordinating partners in the Indo-Pacific, adding: “The administration must
ensure that U.S. security interests in the Indo-Pacific are protected by this
agreement.”
‘FOREIGN POLICY FUMBLE’
Conservative thinkers in the U.S. also weighed in against the move by the new
Labour government in the U.K. “Of course this deal benefits China,” said Luke
Coffey, a senior fellow at the Hudson Institute think tank and a former adviser
to British Defense Secretary Liam Fox.
“People should not let the 99 year use of the military base in Diego Garcia by
the U.S. and the UK provide any comfort,” he added. “Just look at the regrets
and consequences resulting from the transfer of Hong Kong in 1997 under a
similar arrangement.
Texas Representative Michael McCaul, who chairs the House Foreign Affairs
Committee, said the Diego Garcia base was “essential” to countering China. |
Anna Moneymaker/Getty Images
“This was the first major foreign policy fumble by the Labour government. If I
was a Falkland Islander or a Gibraltarian I would be a little nervous.”
U.S. President Joe Biden said in a statement that the deal was “a clear
demonstration that through diplomacy and partnership, countries can overcome
long-standing historical challenges to reach peaceful and mutually beneficial
outcomes.”
Nevertheless, a report in The Times newspaper said U.S. officials warned the
Labour administration in Britain against handing the islands to Mauritius, due
to fears the Chinese could use them to house listening posts.
A U.K. government spokesperson insisted: “We strongly reject these claims. This
historic agreement, welcomed by the U.S. president and the U.S. Department of
State, will secure the future of the U.K.-U.S. military base on Diego Garcia.
“For the first time in over 50 years, the base will be undisputed and legally
secure with full Mauritian backing and is now more protected than ever from
foreign malign influence.”
Others supported the deal. David Vine, co-ordinator of Chagossian advocacy group
Let Us Return USA, said the agreement “could have been done decades ago.”
He said it was a “major exclusion” to exclude Diego Garcia from the right of
return for Chagossians. The U.K. and U.S. expelled the islanders when the area
was detached from Mauritius.
A 2019 advisory opinion from the International Court of Justice, which
adjudicates on disputes between nations, found that the detachment of the Chagos
Islands from Mauritius was “not based on the free and genuine expression of the
will of the people concerned.”
It said the U.K. was “under an obligation to bring to an end its administration
of the Chagos Archipelago as rapidly as possible.”
Phelim Kine contributed to this report.