The European Commission’s anti-trust body approved €3.2bn in German, French, Italian, Polish, Belgian, Swedish, and Finnish state subsidies aimed at helping Europe boost its lagging competitiveness in the electric battery sector.

“Battery production in Europe is of strategic interest for our economy and society because of its potential in terms of clean mobility and energy, job creation, sustainability and competitiveness,” competitiveness Commissioner Margrethe Vestager said.

The subsidies will benefit a 17-companies consortium that in 2017 formed the European Battery Alliance. Public subsidies will be matched by an additional €5bn in private investment. Since 2014, the EU allows for transnational investment in strategic sectors.

Germany will be the biggest investor in the European cluster, contributing €1.25bn. Among the 17 companies participating in the consortium are BMW, Opel, BASF, battery maker Varta and Umicore.

The EU views this investment as significant in the catch-up race for the transition from internal combustion to electric car engines. At the moment, 80% of global battery manufacturing takes place in Asia, predominantly China.