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Lithium battery makers in Europe: Localizing production and navigating geopolitical challenges

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European lithium battery manufacturers are intensifying efforts to localize production, align with EU regulatory objectives, and safeguard their supply chains from geopolitical turbulence. Marcus Williams delves into the current landscape with Basquevolt, Inobat, and LG Energy Solution.

Localization of battery cell and finished battery manufacturing stands as a cornerstone for the European automotive industry. Over the next decade, approximately 50 gigafactories are deemed necessary to establish a robust battery electric vehicle (BEV) supply chain and meet EV production targets.

Nevertheless, significant strides are requisite to transform Europe into a competitive hub for battery and EV production. While European automakers are heavily investing in emission-free vehicles to comply with stringent carbon neutrality regulations by 2050, they are lagging behind their Chinese counterparts in constructing a comprehensive end-to-end BEV supply chain. Chinese automakers are now eyeing the European market with battery EV exports, posing challenges to the region’s aspirations.

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China’s dominance in battery production stems from its early ventures into mass-producing battery-powered consumer electronics and its substantial investments in rare earth metals mining and refining. This advantage extends to battery production line equipment manufacturing, enabling China to outpace the West in automotive production amid the electric powertrain transition.

Andy Palmer, Chairman of Inobat, stresses the urgency for Europe to bolster indigenous manufacturing to fortify the supply chain and diminish logistics emissions. While North America is making strides, with substantial investments aimed at achieving self-sufficiency in lithium batteries and EVs, Europe has yet to reach a comparable level.

Despite this, Europe is gaining momentum, with several prototype and full-scale battery plants underway. Volkswagen Group’s PowerCo is establishing gigafactories in Germany, Spain, and Canada, while Northvolt is supplying Volvo and expanding its presence in Sweden and Belgium. Additionally, ACC, backed by Stellantis, Mercedes-Benz, and TotalEnergies, has launched a battery gigafactory in France.

Other players, such as Samsung SDI and Envision AESC, are also investing in Europe, while Nissan expands its Sunderland plant to produce electric vehicles. These endeavors are complemented by sustainable logistics strategies to support the nascent battery supply chain.

In Slovakia, Inobat has initiated pilot battery cell production, with plans for mass-scale facilities. Gotion High-Tech’s collaboration with Inobat aims to ramp up production capacity. Basquevolt, focusing on solid-state batteries, is enhancing its digital processes with partners like Telef√≥nica and Siemens to streamline production.

However, challenges persist, including the lack of European suppliers for automotive battery production equipment. Basquevolt’s collaboration with Schneider Electric and Comexi aims to address this gap and bolster the European battery supply chain.

Overall, European lithium battery manufacturers are navigating a complex landscape, striving to localize production, ensure sustainability, and mitigate geopolitical risks to foster a resilient and competitive battery industry.

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