Spain puts billions in to fight for a part of the European electric vehicle sector

Spain plans to land new battery and electric vehicle plants. It will use billions of European Union funds for pandemic relief not to stay behind. In the meantime, the global auto sector undertakes the most significant technology transformation in this century.

Spain is Europe’s second-largest car-producing country after Germany. Therefore, Spain has a lot to lose resulted from automakers that haul supply chains and manufacturing for electric vehicles. The country’s automotive sector accounts for 10% of its economy.

France is considered the number three European car producer that, with Germany, pours funds into battery plants. They will support their national automakers, including Volkswagen and Renault.

Spain is less wealthy, without owning a significant carmaker, but it has electric car sales lagging on the EU’s average.

Junior industry minister for Spain, Raul Blanco, said that they have a clear goal. They want Spain to remain the EU’s second-largest car producer in the following several decades, regardless of the technology. Also the world’s eighth-largest carmaker.

The Spanish government plans to spend 13 billion out of the 70 billion euros sent from Brussels on sustainable mobility through 2023.

The government will use these grants to promote domestic sales while improving charging infrastructure and building its first battery cell plant for cars.

In March, the government announced a partly public and partly private partnership to promote electric vehicles.

STIFF COMPETITION

The project will fulfill the manufacturing of batteries in Spain. Central and regional governments may hold a share to promote electric cars and develop infrastructure to support them.

Blanco said that a single battery cell plant would cost over 2.6 billion euros. The proposal sparked competition in Spain’s regions. Catalonia offers land, aid, and public loans to attract a battery plant. Also, neighboring Valencia and Aragon are in contention.

The Spanish government’s plans in promoting electromobility have convinced Ford and Renault to announce new investments in building hybrid cars and engines.

A Ford spokeswoman and a Renault source said that they were checking battery-making projects in the country, which is a potential future source of components.

Madrid offers Volkswagen to choose Spain over Portugal and France for a southern Europe battery factory by 2026. Currently, Volkswagen makes electric vehicles in Slovakia outside of Germany.

According to unions, auto parts makers Bosch and Continental are also closing factories soon, with Bosch moving its production to Poland, where there is cheap labor.

Ramon Tremosa, Catalonia’s government business chief, said that it might offset the recent layoffs if they choose the northeastern region for a battery plant.