Northvolt, the only European battery company already making some cells commercially, was last week forced to file for bankruptcy in the US. Its CEO stepped down, following the failure to ramp up quality production on time.

Unless action is taken, 59% of the battery production planned for Europe is at risk of not going ahead, T&E estimates, and would likely be scrapped. This would lead to a loss of billions of investment and close to 100,000 potential jobs. Domestic battery producers have experienced setbacks, driven by global market dynamics and cheap Chinese batteries. Europe can become self-sufficient in battery cells by 2026, and manufacture most of its demand for key components (cathodes) and materials such as lithium by 2030. But over half of gigafactory plans in Europe remain at risk of either being delayed or cancelled, down from close to two-thirds a year ago.

European car manufacturers have scaled back their electric vehicle plans after sales of battery-powered cars rose by just 2.4 percent in the first five months of 2024, totalling around 800,000 units compared to the same period last year. In a further indication of declining demand, sales dropped by 11 percent year on year in May, according to data from CRU Group, a company that provides information on commodities.

The European Commission and the European Investment Bank (EIB) are announcing a new partnership to support investments in the EU’s battery manufacturing sector. This partnership will see a €200 million top-up (loan guarantee) to the InvestEU programme from the EU Innovation Fund.

Cancelled gigafactory projects include:

Farasis:

Chinese supplier Farasis was originally supposed to build a battery cell factory for Daimler with a capacity of up to 16 GW in Bitterfeld- Wolfen (Saxony-Anhalt, Germany). After the plans were postponed several times, Daimler decided to take over production itself. Since the contract with the city of Bitterfeld was terminated, but Farasis still owns the land, the question remains as to where and when production of Daimler’s battery project will begin.

Britishvolt:

The company wanted to build a battery production plant with a capacity of up to 35 GWh in Northumberland (UK). However, it seems to be struggling with financial problems. So far, only the start of production has been postponed from 2023 to 2025. If the problems are not resolved, the project could even be abandoned. So far, only letters of intent have been issued by Aston Martin and Lotus to cooperate (annual volume of around 10,000 vehicles). It is difficult to imagine that such a project can be realized, even more so with volumes as low as those of the customers.

Varta:

Due to rising costs and delays in orders, German battery manufacturer Varta will stop implementing its plans for its 10 GWh factory in Nördlingen (Bavaria, Germany) and will not proceed until it has received firm commitments from its customers. However, an initial factory for volume production has yet to come on stream, as one automaker, likely Porsche, has already committed as a customer. The factory was originally scheduled to begin volume production in 2023. At present, it looks to Inovev as if the project will not be expanded further.

ACC:

Automotive Cells Company (ACC), with its shareholders Stellantis, Mercedes-Benz and TotalEnergies’ subsidiary Saft, has halted the construction of two of its three planned European gigafactories. The three factories in France, Germany and Italy were planned in response to challenges including controlling the production and supply chain, reducing the environmental impact of transporting batteries by shortening distances, and helping to consolidate the European automotive industry in the face of global competition.

Northvolt:

The Swedish company that produces batteries for electric vehicles, filed for Chapter 11 bankruptcy in the US last month. Swedish media reported that its plans to open a fourth factory, in Borlänge, Sweden had been abandoned. The Borlänge site was announced in 2022. Northvolt agreed to buy an old paper mill and transform it into a plant to make active materials for the cathode (part of a battery cell) to be sent to other Northvolt sites for battery manufacturing. Reports said that the land the site sits on will be sold.

To find out more about the latest gigafactory updates and innovations, meet with solution providers and hear talks from industry leaders, attend the 3rd European Battery Gigafactory Summit: Advances in Planning, Engineering and Operations taking place in Berlin, Germany on May 14-15, 2025.

For more information, visit our website or email us at info@innovatrix.eu for the event agenda.