Spanish Government To Spend $5.1 Bln In Electric Vehicle Production

The Spanish government wants to initiate the production of electric vehicles and batteries with an investment of 4.3 billion euros ($5.1 billion) as a part of the government’s major national spending programme. The Spanish government said on Monday that majority of the funding for the program will be from the European Union recovery funds.

The entire production chain will be included in the government-run plan, said Spanish Prime Minister Pedro Sanchez. The government will be giving away grants to companies for building of the first electric vehicle battery plant of the country and for boosting the manufacture of electric vehicles in the country.

“It is important for Spain to react and to anticipate this transformation in Europe’s automotive sector,” Sanchez said. According to government estimates, between 2021 and 2023, about 19.7 billion euros to the initiative could be contributed by the private sector as well.

Spain is the second largest auto producer of Europe after Germany. It is also the eighth biggest auto manufacturer of the world.  

In recent years, the global auto industry has undergone a tectonic shift towards electric vehicles and greater technological integration and the race to overhaul supply chains and retool manufacturing bases in Europe also includes Spain along with Germany and France.

According to the government expectations, the boost to the electric vehicle industry of the country that would be provided by the new investment – which is a part of a 13-billion euro package that has been set aside for development of sustainable mobility, will help it to contribute up to 15 per cent of the country’s economy by 2030.

Government projections also show that up to 140,000 new jobs could be created by the programme and provide a boost to the national economy of 1-to 1.7 per cednt.

The government also aims to achieve a target of 250,000 new electric vehicles being registered in 2023 which would be a significant surge compared to the 18,000 new electric vehicles registered in 2020, driven by government-sponsored initiatives to encourage people to purchase cars running on cleaner energy and expand charging stations.

Out of the total 750 billion euro recovery scheme announced by the European Union, Spain is expected to receive about 70 billion euros in grants until 2026 which will be used to trigger an economic revival following a hit because of the Covid-19 pandemic.

Even though there have been a few players form the private sector so far that have shown interest in getting a slice of the funds, an alliance to work on a bid has been formed by Volkswagen’s Spanish brand SEAT and utility Iberdrola.

These two companies are working on a wider project that is estimated to cover all elements of electric vehicle production – ranging from production of batteries to the manufacturing of a finished vehicle at the assembly plant of SEAT outside of Barcelona, and this bid plan fits into that wide plan of the two companies.

(Adapted from Reuters.com)

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