Europe’s ambition to develop a robust homegrown EV battery industry to reduce dependence on China is faltering, with Chinese and Asian manufacturers stepping in to fill the void.
The most notable setback has been the collapse of Northvolt, a Swedish startup once celebrated as a cornerstone of Europe’s green energy vision. Despite securing the EU’s largest-ever green loan and support from Volkswagen and BMW, Northvolt filed for bankruptcy protection in the US, with its cofounder and CEO, a former Tesla executive, stepping down.
Across Europe, 12 out of 16 planned European-led battery factories have been delayed or canceled. In contrast, 10 of 13 projects in Europe led by Asian manufacturers, such as China’s Contemporary Amperex Technology Co. (CATL) and South Korea’s Samsung SDI, are moving forward, underscoring a widening gap in the race for EV battery dominance.
Europe’s original vision, driven by massive government subsidies, included factories in Sweden, Poland, Germany, and Canada, designed to produce greener batteries using 100% recycled materials like nickel, manganese, and cobalt. However, this ambition is now unraveling. Industry experts warn of severe repercussions. Andy Palmer, former CEO of Aston Martin, stated that the failure to establish domestic battery production jeopardizes Europe’s automotive industry, risking factory closures and job losses as automakers consider relocating to regions with stronger supply chains.
Other projects are also faltering, with Mercedes-Benz and Stellantis delaying plants in Germany and Italy, while Volkswagen has pushed back capacity targets for its European facilities. The UK’s Britishvolt collapsed last year, further compounding the region’s struggles.
China, supplying 80% of the world’s lithium-ion batteries, has outpaced Europe with massive investments in its domestic EV sector. Companies like CATL and BYD have become global leaders, while European automakers are now scaling back their electrification strategies and canceling battery orders, leaving the continent’s dreams dimming.
