London (CNN Business) German Chancellor Angela Merkel wants countries in the European Union to boost their technological capabilities and push more aggressively into areas such as battery manufacturing for electric cars and cloud computing.

Merkel , who is serving her fourth and final term as leader of Europe's manufacturing powerhouse, said in an interview with the Financial Times that Europe must compete aggressively with tech companies in the United States and Asia.

"I believe that chips should be manufactured in the European Union, that Europe should have its own hyperscalers and that it should be possible to produce battery cells," she told the newspaper.

The European Union has struggled for years to produce leading tech companies. It lacks an innovation hub on the scale of Silicon Valley, and the strategic government support afforded many tech companies in Asia.

Volkswagen VLKAF Germany's automotive giants currently have no choice but to rely on battery producers from South Korea and China to outfit most of their new electric vehicles.is partnering with Sweden's Northvolt to build a battery factory in Germany, but production is expected to start in late 2023 at the earliest.

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