The market debut in June of CATL, China’s high-flying manufacturer of batteries for electric vehicles, has been a rare bright spot for Asian equities. By contrast European stocks, which have also fallen this year, cannot rely on similar trailblazers for a boost.
A test case for whether Europe can deliver the sort of world-class innovation that draws investors is its auto industry. But this risks being too reliant on Asian suppliers just as the world hurtles toward the adoption of electric cars.
German chancellor Angela Merkel knows this. At a recent conference in Berlin she called for Europe to develop its own battery cell production for electric vehicles. The call to action should have come years ago. The likes of BMW and Volkswagen have signed contracts to buy batteries from China’s CATL as well as Korean producers LG Chem and Samsung SDI. These companies have also locked up supplies of key raw materials such as lithium, signing agreements with mines across the world.