Audi CEO calls for more EU investment in chip and battery cell production

Europe must regain lost ground in microchip production, battery cell manufacturing, software development and other digital skills, said Markus Duesmann, CEO of Audi.

Building skills in these areas will help make the region’s auto industry less dependent on complex international supply chains, which struggled and in some cases came to a standstill during the pandemic.

The global semiconductor shortage has taken its toll on automakers, Duesmann said.

Audi faced its own production constraints and would likely continue to do so until 2022.

A local focus on semiconductor production would benefit not only the auto industry, but all industries that make products that require semiconductors, Duesmann said. Automotive news Europe in an interview.

  • Click on here to read the full interview with Markus Duesmann

“It is very encouraging that politicians and companies are pushing to increase production in Europe. We are already pushing to increase battery production in Europe and increase software skills in Europe, which is very positive,” he said. -he declares. “It’s very important for Europe to push to make sure that we have product production here. It’s really wise to invest in that.”

Europe is still “absolutely world-class in mechanical engineering,” but it has fallen behind in key sectors of the high-tech economy and needed serious investment to catch up, Duesmann said.

Europe’s political leaders are already looking to boost industry supply of chips after following a “naïve” approach to outsourcing, EU Industry Commissioner Thierry Breton said in May.

The plan to reinvest in chip production involves the creation of an industrial alliance of major European semiconductor companies and research centers as well as more than a dozen European governments.

In April, Intel CEO Pat Gelsinger said in an interview that the chip giant wanted 8 billion euros ($ 9.7 billion) in government subsidies to build a semiconductor factory. in Europe. Gelsinger also met with Breton for talks on semiconductor strategy.

“The EU has a few champions in the semiconductor industry, but it faces stiff competition from other countries who see chip production as a national priority,” Gelsinger wrote in the Financial Time, adding that these governments offer generous incentives to attract semiconductor manufacturing. “Europe has to match this to have a chance to compete.”

At least 20% of the € 672.5 billion ($ 808 billion) in the EU’s Recovery and Resilience Facility has also been allocated to digital priorities, although it is up to each country to decide how much to spend. specifically for the semiconductor strategy.

Auto makers are investing billions to increase battery cell production in Europe as they move towards selling electric cars after the European Commission proposed that only zero-emission cars should be sold in the block. ‘by 2035, effectively banning gasoline and diesel models.

The Volkswagen Group, Audi’s parent company, plans to build six battery factories in the region with a production capacity of 240 gigawatt hours per year.

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