BRUSSELS -- The European Union has approved 3.2 billion euros ($3.5 billion) in subsidies from seven member countries that want to develop the electric battery industry and challenge China's supremacy.
According to the EU, the member states' funding should unlock an additional 5 billion euros in private investment.
“Battery production in Europe is of strategic interest for our economy and society because of its potential in terms of clean mobility and energy, job creation, sustainability and competitiveness.,” said Margrethe Vestager, the EU Commissioner in charge of competition policy. “The approved aid will ensure that this important project can go ahead without unduly distorting competition."
The commission said the state money will be channeled to 17 different companies covering the whole production chain, from mineral extraction to battery manufacturing and recycling.
The commission's new president, Ursula Von der Leyen, has made combating climate change one of her priorities and the development of batteries for electric vehicles fits in her plan to reduce carbon emissions in the EU by at least 50% by 2030, compared with 1990 levels.
Von der Leyen, who will present details of her so-called European Green Deal later this week, wants to make the EU climate neutral by 2050.