Photo: Northvolt
Europe's idea to build domestic EV batteries to reduce its dependence on China is dying. But China is more than ready to step in where other companies have failed.
The most high-profile example of a major European battery failure comes from troubled Northvolt, a Swedish startup that was once one of Europe's most funded startups and received the largest loan in the EU, backed by Volkswagen and BMW. . It has since filed for bankruptcy protection in the US after a failed rescue package, when its founder and CEO, a former Tesla executive, quit.
Fallout has spread in Europe – Bloomberg reports that 12 of 16 planned European battery factories have been delayed or canceled.
However, China – with the game still years away from development – is poised to fill the gap, with 10 of the 13 projects in Europe moving forward, all led by Asian manufacturers such as China Contemporary Amperex Technology Co. and South Korea's Samsung SDI.
It's a harsh reality in Europe, whose enthusiasm for companies like Northvolt has been fueled by the idea of reducing dependence on China by building green EV batteries using 100 percent recycled nickel, manganese, and cobalt. Factories were planned to be built in Gothenburg, southern Sweden, and Poland, Germany, and Canada, all supported by large government subsidies.
But that dream is over. “Failure to establish domestic battery production capacity threatens the existence of the automotive industry in Europe,” Andy Palmer, former CEO of Aston Martin Global Lagonda Holdings Plc., told Bloomberg. With no EV supply chain in place, automakers “may move production to areas with established battery factories, leading to factory closures with potentially significant job losses.”
Besides Northvolt, Mercedes-Benz Group AG and Stellantis NV have suspended work at two battery factories in Germany and Italy, while Volkswagen said its European cell factories may take longer to reach capacity. UK battery start-up Britishvolt went out of business last year.
Electrek's Take
Still, building a European battery industry has always been a tall order, as China supplies nearly 80% of the world's lithium-ion batteries and is home to the world's six largest EV battery makers, the report said. But it is a clear case of missed opportunity. While European automakers are rolling out new ICE models, China has been racing ahead, investing in its domestic EV industry. By 2021, just as legacy automakers depended on EVs, CATL had become the world's largest battery manufacturer, and BYD's power grew to become a major force in EV development. Meanwhile, European automakers are scaling back their electrification strategies and canceling battery orders.
Now the opportunities in Europe are clear.
Read more: EV battery makers get a $1 billion boost from the EU – but there's a catch
Photo credit: Northvolt
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