Europe’s aspirations to build a self-sufficient electric vehicle (EV) battery industry, aimed at reducing reliance on China, are facing significant setbacks, with several high-profile projects either stalling or collapsing. The most notable failure comes from Northvolt, the Swedish battery startup once hailed as a leader in Europe’s green energy revolution. Despite receiving substantial funding, including a record green loan from the EU and backing from Volkswagen and BMW, Northvolt recently filed for bankruptcy protection in the U.S. after its rescue package failed. This came after the company’s co-founder and CEO, a former Tesla executive, stepped down.
The struggles of Northvolt reflect a broader crisis in Europe’s battery sector. According to Bloomberg, 12 out of 16 planned European-led battery factories have either been delayed or canceled, leaving the continent’s ambitious green energy vision in tatters. At the same time, China, already ahead in battery development, is stepping in to fill the void. Of the 13 battery projects in Europe, 10 are moving forward under the leadership of Asian manufacturers, including China’s Contemporary Amperex Technology Co. (CATL) and South Korea’s Samsung SDI.
This shift represents a painful blow to Europe’s strategy to reduce its dependence on China by creating domestically produced, environmentally friendly batteries, made from 100% recycled nickel, manganese, and cobalt. Initially, projects were set in countries such as Sweden, Poland, Germany, and Canada, supported by large government subsidies. However, with key players like Northvolt failing to deliver, the European dream of a homegrown battery industry is increasingly fading.
Andy Palmer, former CEO of Aston Martin, warned in a statement to Bloomberg that Europe’s failure to establish domestic battery manufacturing could threaten the future of the automotive industry on the continent. Without a reliable EV supply chain, European automakers may be forced to relocate production to regions with established battery industries, potentially leading to factory closures and job losses. Alongside Northvolt’s struggles, other European giants such as Mercedes-Benz Group AG and Stellantis NV have paused work on battery plants in Germany and Italy, and Volkswagen has delayed its European cell factories. Additionally, UK battery startup Britishvolt ceased operations last year, further highlighting the industry’s troubles.
