Renault chairman warns of 'Chinese storm' over Europe's EV industry
3 Min Read
Jean-Dominique Senard told Reuters that Europe has heavily relied on China for raw materials.
-
Renault chairman Jean-Dominique Senard believes that China's EV sector and raw material supply chain was the result of years of effort that would cost billions of euros to reproduce. (Bloomberg)
According to Renault Chairman Jean-Dominique Senard on Saturday, a "Chinese storm" is looming over Europe's electric vehicle industry.
Senard told Reuters on Saturday that China's recent move to ban exports of two metals used in semiconductors and EVs, gallium and germanium, should raise warning lights for European policymakers since it demonstrates the continent's over-reliance on China and the necessity to construct a costly supply chain.
China stated earlier this week that from August 1, purchasers of two chipmaking metals, gallium, and germanium, will need to apply for export licenses. Beijing's action has been interpreted as retaliation for Western restrictions on China's access to sophisticated chip manufacturing equipment.
"When I talk about a Chinese storm, I'm talking about the strong pressure today related to Chinese (electric) vehicle imports into Europe," he explained.
Senard added, "We are capable of making electric vehicles, but we are fighting to ensure the safety of our supplies," detailing that China's EV sector and raw material supply chain was the result of years of effort that would cost billions of euros to reproduce.
Read more: Biden signs on $52.7 bln microchip investment bill to 'counter China'
China's export restrictions are intensifying a technological battle with the US, potentially disrupting global supply chains even more. Europe is caught in the crossfire, forcing it to seek alternatives in the worst-case situation.
Senard warned that "If there's a real geopolitical crisis, the damage to battery factories solely powered by products coming from outside will be considerable, that's the issue." He further said he believes that the development of alternative fuels, such as synthetic e-fuels and hydrogen, would be critical in the case of a sudden scarcity of batteries owing to a lack of raw materials.
"As any careful manufacturer would do... we're looking for alternatives to avoid paralyzing the country if, for example, we run out of batteries."
Yellen concerned about China's export controls
Europe is not the only one concerned with the issue as the US is also worried about recent Chinese export limits on rare earth elements used in microchips.
Janet Yellen, the US Treasury Secretary expressed in a discussion hosted by the American Chamber of Commerce that she was "concerned about new export controls recently announced by China on two critical minerals used in technologies like semiconductors. We are still evaluating the impact of these actions, but they remind us of the importance of building resilient and diversified supply chains."
The Wall Street Journal reported last month that the United States is considering introducing more restrictions on chip exports to China, claiming concerns over the possibility of its use in the military and cyber industry.
Biden pledged late last month to increase US allies' engagement in the anti-China chip campaign.
