AS electric car sales soar, Europe has started to build up its capacity to produce batteries on the continent but it remains far from reducing its dependence on Asia.

China, Japan and South Korea produce most of the world’s electric car batteries.

Europe now has projects to build 38 gigafactories with a combined annual output of 1,000 gigawatt hours (GWh) and an estimated cost of 40 billion euros (US$48 billion), according to a latest report by Transport & Environment (T&E), a non-governmental organization.

This annual supply could be reached by 2029-2030 and would be the equivalent to the production of 16.7 million battery electric vehicles, a T&E spokesman said.

“Given the monstrous increase in demand, there is a major stake at hand for manufacturers to break the battery makers’ oligopoly,” said Eric Kirstetter, a sector analyst at consulting firm Roland Berger.

In Sweden, the startup Northvolt expects to reach annual production of 150 GWh in Europe by 2030, with one plant under construction now and two much bigger ones on the drawing board.

Automakers, which are under pressure to transition out of fossil fuel vehicles, are putting money into battery production.

German giant Volkswagen has invested in Northvolt and also plans to build five other battery plants.

European governments are backing the projects because they want the continent to maintain a major role in future automobile manufacturing.

Asian manufacturers are also investing in Europe, with the Chinese group AESC planning to work with Toyota and Renault on battery plants in Britain and France.

Two South Korean companies, LG Chem and SKI, have already opened factories in Poland and Hungary, and China’s CATL is building one in Germany.(SD-Agencies)