The European Commission's anti-trust body has approved billions of euros in state aid to the electric battery industry. The move is aimed at helping the EU catch up in the strategic production sector, DW reported.

EUR 3.2 billion ($ 3.5 billion) mega-subsidy from Germany, France, Italy, Poland, Belgium, Sweden and Finland will go to 17 companies and will help generate an additional € 5 billion in private investment, according to a release cited by AFP.

The move is part of a major push led by Germany and France to prepare Europe for the transition from gas and diesel combustible to electric engines due to environmental concerns.

The European automotive industry employs over 10 million people and the EU - led by Germany and France - is deeply concerned about Europe's dependence on car batteries from Asia.

"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," Margrethe Vestager, the EU commissioner in charge of competition policy, said. 

The Commission, which commits itself to EU antitrust legislation, usually adheres to a strict anti-subsidy policy, but gave more freedom to countries to support strategic transnational projects in 2014.

The subsidies are part of an EU campaign called the European Battery Alliance.

The campaign, launched in 2017, covers companies such as German car giant BMW and chemical multinationals BASF and Solvay.