Summary
- Northvolt, a battery startup founded by former Tesla employees, was seen as Europe’s solution to reducing dependence on Chinese-produced EV batteries
- Northvolt ultimately failed in 2024 due to bureaucratic roadblocks, production issues, and competition with established Chinese companies
- Several European EV battery projects were postponed or abandoned in 2024, leading to a reduced projected battery capacity for 2030 in Europe
- European battery industry may focus on joint ventures with Chinese companies in the future, as seen with InoBat partnering with Gotion
- European startups like Verkor and Ilika are looking for investment opportunities and may consider partnerships with Chinese companies due to capital constraints
Article
Northvolt, a battery startup founded in 2017 by former Tesla employees, was seen as Europe’s solution to reducing dependence on Chinese EV battery production. The company received significant investments, formed partnerships with automakers, and had facilities in operation. However, Northvolt faced challenges such as bureaucratic obstacles, production issues, slower demand, and mismanagement. Ultimately, it was unable to compete with more established Chinese companies like BYD and CATL, leading to its downfall in 2024.
Following Northvolt’s collapse, some investors became wary of other battery projects in Europe. Reuters reported that several companies had postponed or abandoned European EV battery projects, causing a significant decline in Europe’s projected battery pipeline capacity for 2030. Despite this setback, European ambitions to develop their own EV batteries persist, with a shift towards seeking joint ventures with Chinese companies as a potential solution to compete in the market.
InoBat, a Slovakian startup, received a boost when Chinese battery maker Gotion acquired a 25% stake and entered a joint venture to build European gigafactories. InoBat also raised significant funding, totaling 400 million euros, with the support of strategic investors. The involvement of Chinese companies like Gotion provides reassurance to investors and automakers due to their proven track record and scale in the battery industry.
The partnership between InoBat and Gotion has proved successful, with InoBat serving as Gotion’s “European face” for larger gigafactory projects. The pilot production line in Voderady, near Bratislava, demonstrates the collaboration’s potential for future growth. Other China/Europe tie-ups, such as the agreement between Stellantis and CATL for a LFP battery plant in Spain, showcase the trend of strategic partnerships to meet the demand for EV batteries.
While some projects are proceeding without Chinese involvement, such as France’s Verkor and Britain’s Ilika, they will need to prove themselves to attract major automotive customers. Verkor, supported by Renault, is constructing a gigafactory in Dunkirk, while Ilika plans to provide test battery cells to multiple partners. These companies face the challenge of securing capital and demonstrating their ability to deliver reliable products to gain trust from automakers.
For European startups navigating the competitive landscape of the battery market, access to capital remains a significant concern. Chinese battery firms, with their substantial resources, stand out as potential partners for European companies seeking to survive and thrive in the industry. As companies like Verkor and Ilika continue to develop and scale their operations, the question remains whether more European firms will look towards the East for strategic collaborations and investments to advance their battery technology and production capabilities.
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