Job creator or industry killer? Europe’s EV sector faces Chinese investment dilemma
Truck maker Windrose wants to be ‘first of many’ to bring EV ecosystem to Europe, matching Macron’s ambitions for ‘Battery Valley’ in France
Eyebrows raised and brow furrowed into a puzzled smile, French President Emmanuel Macron held a model of a cleanly sculpted, sheer white truck. To his left, Wen Han, a 35-year-old Chinese entrepreneur, beamed through thick, black-rimmed glasses.
In Macron’s hand was a miniature Windrose electric lorry, its sleek, forward-leaning nose and central driving position evoking science fiction more than the gritty world of road haulage.
The Chinese company, founded by Han just three years ago, announced this week that it would build a €175 million (US$199 million) factory in northern France. Bigger investments and flashier names came to last week’s Choose France summit, but few were set against a geoeconomic backdrop as charged as Windrose Technology’s.
The European Union is locked in a trade dispute with China over electric vehicles. It is also wrestling with whether and how to harness Chinese investment in the sector. Around the continent, a debate is being waged on whether China’s prowess in the sector can be a job creator or an industry killer.
Han is certain it is the former.
“He told me he wants me to bring the whole ecosystem to France,” Han said in an interview, when asked what Macron told him.
Although only 30 Windrose trucks are on the roads worldwide, Han is ambitious. He wants to make 4,000 of them a year in France from 2027 and is eyeing an American plant too. He is already planning to float Windrose on a US stock exchange and told Macron he would like a secondary listing in France.
“So I asked him how he can make that less painful. He promised that he’ll help me sell trucks and raise money – it was so nice of him to say that to a young guy, everyone else was a billionaire,” Han said, namechecking guests including Blackstone Group’s Stephen Schwarzman and Stella Li, the executive vice-president of Chinese EV maker BYD.
Han’s electric truck factory, which will bring 300 jobs to Onnaing, a town of under 9,000 people near the Belgian border, fits nicely with Macron’s strategy of turning northern France into “Battery Valley”.
Down the road from where Han hopes to soon break ground, French company Alteo and South Korea’s W-scope were discussing a €600 million investment in a car battery component factory, French daily Le Monde reported.
Among the big players already present, Taiwanese battery company Prologium is building a €5.2 billion gigafactory in Dunkirk, and Chinese-Japanese firm Envision is constructing a plant to build batteries for a nearby Renault factory in Douai.
But there have not been as many big ticket Chinese investments as expected, given Macron’s outward courting of the likes of BYD, which sold more cars in Europe than Tesla for the first time last month.
On a call with Chinese President Xi Jinping on Thursday, the French leader told him that “Chinese investments are welcome in France. But our companies must benefit from fair conditions of competition in our two countries. This is a fundamental point”, according to a social media post by Macron.
“Building an EV battery supply chain is a clear priority for President Macron, and attracting players from Asia is essential to France’s ambitions,” said Mathieu Duchatel, director of the Asia programme at the Institut Montaigne, a Parisian think tank.
“On EVs, France’s strong support for the EU’s anti-subsidy action and Macron’s personal involvement in seeking to attract BYD in France are the two sides of the same coin – the priority is industrial capacity in France,” he added.
But while Macron will welcome the 300 jobs, European leaders have made no secret of the fact that they want to attract value-added manufacturing, rather than assembly plants.
“From Macron’s standpoint, it is important to stress reciprocity. The Chinese market has been closing to European companies while Chinese companies have been pretty aggressive in France lately. Many are looking for opportunities, especially in fields such as batteries and EVs,” said Philippe Le Corre, a senior fellow at the Asia Society Policy Institute’s Centre for China Analysis in Paris.
The European Commission is now haggling with the Chinese government over investments that would be linked to a lowering of the tariffs on Chinese-made EVs. It wants China’s market leaders to transfer know-how and technology to European companies and to make sure the most valuable part of the vehicle – namely the battery – is made in Europe too, but talks are not going well.
“They are not making progress, so much so that we were supposed to hold the high-level economic [and] trade dialogue, and I’m afraid we are not going to hold it because … in order to hold it, we need progress. We need deliverables,” EU ambassador to China Jorge Toledo said on Friday at a conference in Beijing.
Windrose’s modular manufacturing processes will involve importing batteries from CALB and Eve, two of China’s biggest battery makers. It will assemble the vehicles and make parts such as the truck’s chassis and power train in France, but Han said he was confident the supply chain would follow.
“We would like to be the first of many movers – we want to show that it is possible,” Han said, adding that “Europe is generally friendly for Chinese companies”.
Speaking on the phone from Brussels Airport, he pointed to the fact that all of the buses whizzing past the window were made by BYD.
“After we announced we would be manufacturing in Europe, we had great interest from battery cell and motor makers to come to the area,” Han said. “We want to bring the ecosystem to Europe.”
Mark Duchesne is Windrose’s head of global manufacturing and a veteran of Tesla and the recently bankrupt Swedish battery company Northvolt.
He said the company was “battery cell-agnostic”.
“We are willing to work with anyone,” he said. “We can use cells from anybody, it just needs to have the performance, reliability and efficiency. We would love to have a French [battery] supplier, but it does not exist.”
Duchesne dismissed the idea that companies would start handing over technology to European firms, saying the dynamic was “much more complicated than a reverse brain dump”.
“The technology started in Europe … none of it is new – it’s a truck, but we like to think we’re better at integration. We see the challenge as a transfer of attitude rather than knowledge,” said Duchesne.
Even though he dismissed the suggestion that “nobody in the world can compete with China”, he said attitudes in the West had allowed it to fall behind.
“Companies got access to low-cost manufacturing and they thought China would be happy to stay as a source of cheap labour … little did they know. The world fell asleep while China became the experts,” he said.
“Some of us have just forgotten what it is like to be nimble, quick and efficient,” Duchesne added.
At US$250,000, Windrose’s truck retails at a fraction of the price of the Tesla Semi model with the most comparable range. Many have pointed to the visual similarities between the two models, but Duchesne laughs it off.
“We get asked all the time – did we copy Tesla? But we didn’t, we copied the laws of aerodynamics,” he said.
While many Chinese investors in Europe prefer to keep a low profile, Han wants to make a splash. Last summer, he paid to sponsor the basketball team in Antwerp, where the company has its European headquarters, renaming it Windrose Giants Antwerp.
“Chinese manufacturers have been fantastic at building but not at marketing,” Han said, adding that he wanted to “make trucks cool again”.
He is also confident that the scepticism in Europe towards Chinese investments will subside. “Being a Chinese person – it’s always been hard,” he said, laughing. He added that “many people are anti-innovation”.
Han said the Japanese faced a similar situation 30 years ago, but noted that in the US, some of the most popular pickup trucks – the “quintessential American product” – were now made by Toyota.
“The Koreans had the same issue, Hyundai needed to give lifetime warranties, and look at them now,” Han said.
“It shows that things can change.”