Author | Pan Lei
Edit | Zi Yu
Image source | Official information of the Polish Investment and Trade Agency
On many occasions, Poland is a country that can spark many topics. Most of these topics focus on major country relations, geopolitics, etc.
But what many overlook is that Poland is the fastest-growing and most economically active country in Europe over the past 30 years, with a per capita GDP of more than $15,000 in 2020 — and before joining the European Union, a European Commission report said it would take 33 years for Poland to reach 75 percent of the EU's moderately wealthy level.
According to information released by the World Bank and the OECD, Poland is now a "high-income economy".
The fact is that Poland has been the biggest beneficiary of Europe's unified market over the past 30 years and has played a central role in the new energy transition, which concerns Europe's most important automotive industry.
This has attracted the attention of Poland's global new energy giants, including the head players from China.
According to a revelation at the end of last year in Poland's "Business Pulse Newspaper", power battery giant Ningde Times plans to build a giant battery factory in Poland, with a supposed investment of up to 2 billion euros.
So far, this news has not been officially confirmed by the CATL era.
But this has shown from the side that Poland, although not the traditional automotive industry center of Europe like Germany, is developing into a unique electric vehicle industry agglomeration area – which may be the last bastion of the European automotive industry facing huge competitive risks.
Song Xin, an expert on international issues and a former EU China-EU policy adviser, believes that the difference between the Polish economy is that it has withstood various shocks brought about by joining the EU's unified market, and at the same time benefited from the unified market and achieved economic take-off.
A document provided to Chuangbang by the Polish Investment and Trade Agency (PAIH) representative office in China shows that Poland has a stable economy and a geographical location in the center of Europe, which attracts the attention of international investors, including automobiles.
Auto industry chain giants gather in Poland
Before the news of the NINGD era investing a huge amount of 2 billion euros in the construction of a battery factory, LG Chem, the world's second-ranked battery giant, opened a battery factory in Wroclaw, Poland, in 2016.
The plant's latest capacity could be as high as 65GWh, making Poland the largest power battery production center in Europe.
In addition, Northvolt, a Local battery producer backed by Europe, is also expanding its own production capacity in Gdansk, Poland, which may have a maximum potential capacity of 12GWh.
Northvolt CEO Peter Carlsson said That Europe's (homegrown) cell manufacturing capabilities are key to Europe's future industry.
In addition to the two battery manufacturers LG Chem and Northvolt, the supporting system in Poland is gradually complete.
SK Innovation has a lithium battery separator plant in Poland, and battery cathode material supplier Umico's Greenland plant in Poland is responsible for providing the necessary raw materials for LG Chemical production.
Foosung Chemicals from South Korea also supplies electrolytes for LG Chem.
In addition to the industrial chain of Korean companies, China's battery material suppliers are also settling in Poland.
At the beginning of 2018, the domestic electrolyte leader Xinzhubang decided to invest in the construction of a factory in Poland, and the battery materials such as electrolyte produced were also supported by LG Chem.
At the beginning of 2021, LG Chem participated in a new round of capital increase in Poland's new state, investing 17.0455 million PLN (about 4 million US dollars) and obtaining 15% equity.
This has made Poland one of the most important suppliers of lithium batteries in Europe, serving customers such as BMW, Volkswagen, Audi and Porsche.
In addition to the power battery industry, traditional auto parts giants such as Valeo, ZF and Brembo also have factories or businesses in Poland.
In terms of automakers, the Volkswagen Group has four plants in Poznan, Poland, employing more than 11,000 people.
Stellantis' plant in Teč, Poland, also has an annual production capacity of 400,000 units.
In 2016, Mercedes-Benz chose to invest in an engine plant in Jawor, Lower Silesia, Poland.
Another traditional car giant, Toyota, also has a factory in Poland that specializes in hybrid engines.
According to information provided by PAIH to Chuangbang, as early as 2017, the car manufacturer in Poland earned 37.5 billion euros, and the number of employees in the automotive industry exceeded 470,000.
As a result, Poland became a major manufacturing hub for the European automotive industry and may even play the role of a European electric vehicle base.
The European automotive industry is in jeopardy
Poland's soaring progress on the European automotive map reflects the decline of Europe's traditional automobile manufacturing center from one side.
According to data from the European electric vehicle statistics website eu-evs, Tesla's Model 3 and Model Y ranked in the top two in February in Germany's top 10 electric vehicle sales, with sales reaching 3690 and 2254 respectively.
The Volkswagen Group's ID.4 and ID.3 ranked sixth and seventh, with sales of just over 1,000 units.
In the past 100 years, no car company has been able to take the lead from German car companies in Germany – but now Tesla has done just that – in February Tesla's market share in German electric vehicles exceeded 21%, Volkswagen was 10.1%.
Italians still maintain enthusiasm for fiat as an old brand in the field of electric vehicles, which ranked first in sales of electric vehicles in February, but Tesla also stole 8.8% of the market share in Italy.
So far, Tesla has sold nearly 16,000 electric vehicles in 14 European countries, with a market share of 11.9%. Correspondingly, Volkswagen's market share of electric vehicles is 9.3%, Audi 7%, BMW 5.7%, Mercedes-Benz and Peugeot are both 4.8%, and Renault is 4.6%.
It is worth mentioning that Tesla's gigafactory in Berlin, Germany, has officially begun delivering locally manufactured ModelY on March 22, which will put more pressure on European manufacturers, including German car companies.
In fact, Tesla has dominated the European electric car market.
This has made the investment in Poland by electric vehicle industry chain giants such as LG Chem, Northvolt, SK Innovation, Yumiko, Houcheng Chemical and Xinjiubang, and even the potential Ningde era, strategic for the European automotive industry.
According to the relevant information presented by PAH to Chuangbang, Poland is already a leader in the European electric vehicle industry.
But behind Poland's promise to become Europe's car savior is the economic miracle that Poland has created in the past 30 years.
Of the countries that broke away from the "Soviet model," Poland was the first to make the transition, and now seems to be the most successful— only after a brief "shock" of the upheavals in the Soviet Union and Eastern Europe, the economy embarked on a rapidly developing curve.
Over the past 30 years, Poland's GDP growth has averaged 4%, the highest in Europe.
Poland has suffered only one recession since 1989, and it quickly recovered a few months later, and even after the 2008 global financial crisis, Poland maintained its economic growth.
Why can Poland make cars?
Poland has its own automobile industry for a long time.
In the 1950s, the Polish FSO automobile factory produced the "Warsaw" series of cars after introducing the technology of the Gorky Automobile Plant in the Soviet Union.
After continuous upgrading, the Warsaw sold well, producing about 250,000 units in the 1950s and 1970s, some of which were also exported to other socialist countries at the time, including China.
Later, FSO began to cooperate with Italy's Fiat in the late 1970s, launching the "126P" (Polonez), which was also exported to China, and the number even reached tens of thousands.
After the drastic changes in the Soviet Union and Eastern Europe, the FSO automobile factory also began "privatization" and "international cooperation", but the experience was quite tortuous.
General Motors in the United States, and daewoo Motor before that, have both had partnerships with FSO.
Later, FSO's majority shareholder became a Ukrainian company, and there were even rumors that China's Chery intended to acquire FSO.
However, now on the promotional materials of PAIH, the name of FSO can no longer be found.
It is worth mentioning that even in the most brilliant days of FSO, Poland was not an important automobile manufacturing center in Europe, but at least it laid the foundation for the development of the automotive industry in Poland.
According to public information, Poland now has more than 1,000 registered automobile companies, with strong supporting capabilities, providing a relatively complete automotive industry chain.
In addition to the industrial support, Poland itself is also a potential consumer market.
Central and Eastern Europe has a population of 150 million, of which Poland accounts for a quarter.
Poland is also the largest economy in Central and Eastern Europe and the sixth largest economy in Europe, with a GDP of US$596.6 billion in 2020.
In addition, labor costs in Poland are lower.
According to the Polish Statistical Office, the average wage in Poland is about 1300 euros, while the average wage in Germany, France and Sweden is more than 4000 euros, and Spain and Italy are also more than 2500 euros.
According to the latest data from Eurostat, there are currently 13 member states of the European Union with a monthly minimum wage of less than 1,000 euros, of which Poland is about 655 euros.
Song Xin also told Chuangbang that Poland has the most cost-effective labor resources in the EU, and at the same time it is in the unified market of the EU, so some companies, including Germany, have begun to land in Poland.
In terms of new energy, Poland has even developed a "hydrogen strategy".
According to the strategy, Polish companies expect to share more than 50% of the hydrogen supply chain by 2030 – Poland is currently the third largest producer of hydrogen in Europe and the fifth largest in the world.
Because of its presence in the EU's unified market, Poland can also receive some financial assistance from the EU.
According to the news recently released by the European Commission, the EU allocated an additional 136 million euros to support green transformation projects in some parts of Poland, of which more than 47 million euros were used for renewable energy projects.
According to the data, from 2007 to 2020, Poland received about 153 billion euros of financial support under the guidance of the "EU Cohesion Policy" alone.
In 2021-2027, including direct subsidies and concessional loans, as well as the EU Cohesion Policy Plan, there will be nearly 220 billion euros in funding. And Poland has shown interest in attracting investment in the automotive industry, including plans to sell 1 million new energy vehicles in Poland by 2025.
The PAIH document also said that the Polish automotive industry will benefit from the covid-19 pandemic that disrupts existing supply chains.
Beata Javorcik, chief economist at the European Bank for Reconstruction and Development, said the COVID-19 pandemic has exposed the concentration of suppliers in the global supply chain.
According to the Polish Institute of Economic Research, Poland is expected to be the biggest beneficiary of EU member states in the post-pandemic wave of business relocations – which could bring up to US$ 8.3 billion a year.
This means that Poland, located in the heart of Europe, is geographically equivalent to China's Henan, and intends to maximize this advantage of accessibility.
In addition, the above-mentioned document also lists Poland's advantages and layout in human resources (more than 90% of Polish citizens have secondary education, etc.), innovation (artificial intelligence, etc.), and multi-industry areas, including automobiles.
And, of course, the EU's most attractive investment incentives.
This includes preferential tax policies in each region, and the whole of Poland is a special economic zone, so there is a chance that investments anywhere are exempt from corporate income tax, and R&D and innovation can be tax relief.
These preferential policies include corporate income tax relief for 10 to 15 years, among others.
These advantages have attracted battery giants such as the Ningde era and LG Chem - both to set up large production bases in the hinterland of Europe and to radiate major car companies in Europe.
Song Xin pointed out that as Ukraine is affected by the Russian-Ukrainian conflict, Poland will also usher in a large number of cheap labor, as well as factories relocated from Ukraine, which is a new positive for Poland.