Decision by France and Germany to build battery plants will drive down electric vehicle cost, say analysts

Volvo FL electric

Decisions by France and Germany to build domestic battery plants for electric vehicles will drive down the costs of the technology in HGVs, according to industry analysts.

The announcement by the two European countries that they will invest in battery cell production plants in their own countries in order to protect the industry from Asian rivals, comes as Volvo Trucks handed over its first two fully electric lorries to companies in Germany.

A refuse truck was delivered to waste and recycling company Renova and a distribution vehicle was handed over to DB Schenker; both will be operated in Gothenburg.

The two FL Electric models are part of a pre-series developed in collaboration with selected customers by the truck maker.

France has pledged to invest up to €700m (£600m) to build a domestic battery plant for electric vehicles (EV) and it follows Germany’s announcement in November 2018 that it would do something similar to help supply the European automotive industry.

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A spokeswoman at analysts Fitch Solutions said Volvo would be assembling its electric trucks at Renault’s factory in France, “so the battery technology will most likely be the same in Renault trucks.”

She said: “As such, the production cost of an electric truck should benefit from the economies of scale.

“In the case of Volvo, the Volvo Group stated that it wants to share the costs of expensive technologies across the group to take advantages of wider cost distribution.”

The Fitch Solutions spokeswoman added: “We believe the introduction of more EV battery production plants in the EU will create more competitive pricing for batteries as vehicle manufacturers will be able to source EV batteries from a number of players.

“While electric buses and trucks use slightly different battery cells - larger and heavier - than passenger vehicles, we expect the overall cost of the battery technology to decrease.”

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