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Build batteries or lose jobs, auto bosses tell Europe

Build batteries or lose jobs, auto bosses tell Europe
From Reuters - September 13, 2017

FRANKFURT (Reuters) - Europe shouldnt rush to abandon the combustion engine and must build up its own production of electric car batteries to compete with China, auto suppliers and manufacturers said at the Frankfurt motor show.

The comments come as the future of the car has become a hot topic in campaigning ahead of Germanys Sept. 24 election, especially after Britain and France announced plans to eventually phase out combustion engines to try to cut pollution.

Roberto Vavassori, president of the European Association of Automotive Suppliers (CLEPA), warned a headlong rush to electric cars would hand business to China, which along with South Korea and Japan dominate battery production for such vehicles.

We need to provide a sensible transition period that doesnt give unwanted gifts to our Chinese friends, he said, estimating European automakers were paying 4,000-7,000 euros ($5,000-8,000) to China for batteries for every electric car.

Vavassori called for a European drive to develop the next generation of battery cells. He said carmakers and politicians should look at other ways of cutting vehicle emissions too, such as more efficient engines and synthetic fuels.

Germanys Daimler (DAIGn.DE) and Volkswagen (VOWG_p.DE) both announced plans on the eve of the Frankfurt show to accelerate their shift to electric cars.

The head of Volkswagens core auto division said on Wednesday that European industry should come together to create a regional supplier of batteries.

For the initial phase, I still feel in good hands with the Korean suppliers, but I would appreciate if competition were to grow and a European consortium would emerge, VW brand Chief Executive Herbert Diess told Reuters.

EUROPE AT RISK

German Chancellor Angela Merkel has raised the possibility of state support to bring chip and battery production back to Europe and her Social Democrat challenger Martin Schulz has also called for investment in cell production in Germany.

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