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France to host pilot plant for Franco-German battery consortium - source

France to host pilot plant for Franco-German battery consortium - source
FILE PHOTO: A traffic sign pointing to a parking site for electric vehicles is pictured in Ostfildern near Stuttgart, Germany, August 19, 2019. REUTERS/Ralph Orlowski -
Ralph Orlowski(Reuters)
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PARIS (Reuters) – France will host a pilot plant to make electric car batteries, a French Finance Ministry source said, part of a pan-European project to rival Asia’s dominance of the battery market.

France had committed 700 million euros (621 million pounds) and Germany would offer 1 billion euros towards a project that envisaged setting up plants in both nations in future, the source said of the plans. A minister said the plans would be announced on Thursday.

The electric car battery project aims to repeat the success of Airbus <AIR.PA>, which began producing aircraft 50 years ago as a pan-European project with public support. However, efforts to mirror Airbus in other industries have proved more difficult.

French Economy Minister Bruno Le Maire told lawmakers in parliament on Tuesday that the plans for battery industry would be announced on Thursday when he meets his German counterpart Peter Altmaier in Paris, although he gave no details.

“First there will be a pilot factory and then there will be factories in both countries,” the Finance Ministry source said, adding that the pilot site would be in France.

France and Germany have asked the European Commission to approve state subsidies for a consortium including carmaker PSA <PEUP.PA>, its German subsidiary Opel, and French battery maker Saft <TOTF.PA>, as well as Siemens <SIEGn.PA> and Manz.

The European Union allows state aid in certain conditions under its rules for Important Projects of Common European Interest (IPCEI).

EU Energy Commissioner Maros Sefcovic and Competition Commissioner Margrethe Vestager have signalled support for the battery cell initiative.

Germany is considering supporting a second European production consortium with preliminary agreements expected in the coming months.

France and Germany also plan joint investment of public funds in data storage facilities to wean Europe away from foreign centres and spur artificial intelligence investment.

(Reporting by Leigh Thomas; Editing by Richard Lough and Edmund Blair)

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