The EU Commission has approved an €837 million Spanish government programme to support the production of batteries for electric vehicles under EU state aid rules. The programme is open to battery manufacturers and essential components or related raw materials suppliers.
The support will be provided in the form of direct grants and loans. The maximum amount of aid per beneficiary is €300 million for investments in the production of batteries, €100 million for essential battery components or €25 million for investments in the extraction of raw materials. The aid must be granted by 31 December 2025.
“This €837 million Spanish scheme to support production of batteries is an important step in the transition to a net zero economy, while protecting the level playing field in the single market and in line with cohesion objectives”, says Margrethe Vestager, Executive Vice-President in charge of competition policy.
The approval paves the way for the second call of the so-called PERTE VEC – a funding programme for electric and connected vehicles projects considered strategic for economic recovery and transformation. As reported, Spain’s government intends to launch two new tenders for the production of electric vehicles and batteries in July 2023.
Volkswagen received almost half of the available funds in the first funding round for measures such as the electrification of the factories in Seat Martorell and Pamplona, as well as the creation of a battery ecosystem for electric cars in Spain. That includes the battery factory near Valencia. And the Group says it would submit a new application to manufacture additional EVs in Spain. Last year, VW Group announced that it will invest a total of €10 billion in elctric mobility projects in Spain. Other carmakers, such as Renault and Ford, are also considering applying for the funding.
According to Brussels, the aid scheme is in line with the Temporary Crisis and Transition Framework. The latter had been put in place during the pandemic and was extended due to the consequences of the war in Ukraine.
“The Commission concluded that the Spanish scheme is necessary, appropriate and proportionate to accelerate the green transition and facilitate the development of certain economic activities, which are of importance for the implementation of the Green Deal Industrial Plan, in line with Article 107(3)(c) TFEU and the conditions set out in the Temporary Crisis and Transition Framework”, it says in the EU Commission’s statement. “On this basis, the Commission approved the aid measure under EU State aid rules.”
Keyword: EU approves Spanish aid programme for EV batteries