Can European domestic lithium-ion battery manufacturers gain solid footing in the 800 GWH race?

summary

Earlier this month, the European Union announced an investment of 852 million euros ($1 billion) in six lithium-ion battery plants, which are part of the EU’s battery value chain expansion plan.

Six EU-funded battery factory projects

The total capacity of these projects is approximately 56 GWH and is expected to be operational by 2030. Here is a specific list of projects:

In addition to increasing the manufacturing capacity of lithium-ion batteries in Europe and reducing reliance on external supply chains, this investment is also part of a broader technology and green transition initiative. The focus is on innovative manufacturing technologies and low carbon emissions. For example, the Agathe project aims to reduce iterations of lithium-ion battery technology in alignment with the EU’s climate neutrality targets. The six factories receiving the funds are expected to reduce their greenhouse gas emissions to 91 million tonnes of Co2 over the first decade of operation.

However, this investment also has certain drawbacks. For one, the capacity of 56 GWH is relatively limited and cannot meet market demand in European sectors such as electric vehicles and energy storage. This means that in the short term we will not change our dependence on external supply chains. Second, the project emphasizes “innovation” but relies on the “technical maturity” criteria assessed by independent experts. Uncertainty surrounding the scale-up of several technologies, such as the innovative manufacturing process of high-performance batteries, can also lead to mass production. Furthermore, the project is concentrated in a small number of countries in Western and Central Europe, leaving parts of Southern and Northern Europe without coverage, and the investment does not support raw materials or recycling programs.

European lithium-ion battery capacity is expected to exceed 800 GWH by 2030

Based on the global lithium-ion battery plant tracker in interaction analysis, the European lithium-ion battery capacity landscape is undergoing dynamic changes. As of the second quarter of 2025, the total capacity of the lithium-ion battery project in Europe (excluding battery packs and solid state batteries) exceeded 1.9 TWH. However, factors such as slowing growth in electric vehicle demand and greater complexity than expected to build supply chains have led some projects to face setbacks. In fact, projects by companies such as Northvolt have been stagnant or are halted. As of the end of 2024, lithium-ion battery capacity in Europe was over 220 GWH. The factory, built by South Korean battery companies (LGES, SK ON, SAMSUNG SDI) in Hungary, Poland and other countries, contributes nearly 70% of the total, highlighting the control of foreign capital in the sector.

Interaction analysis shows that lithium-ion battery capacity in Europe is expected to reach over 800 GWH by 2030. By then, the share of capacity accounted for by European domestic companies is expected to rise to 43%. Chinese companies will reach approximately 29%, while the proportion represented by Korean companies will decrease to 23%. The regional capacity landscape is expected to see clear trends from domestic investment and foreign capital controls towards diversified competition.

The percentage of capacity represented by European domestic companies is expected to rise to 43% by 2030

Final Thoughts

It is noteworthy that European companies still face major challenges when it comes to expanding battery capacity on a large scale, compared to the benefits of First Mar bars built by Chinese and Korean companies in the lithium-ion battery sector. Not only did European companies enter the market later, they also need to tackle practical hurdles such as the stagnation of several projects due to the high complexity of supply chain development, fluctuations in demand and insufficient technical maturity.

The EU is creating favorable conditions for local businesses through policy support, but multiple factors need to be consistent to achieve the advantages of late arrears and secure a solid position in the domestic market. Meanwhile, demand for electric vehicles in Europe needs to recover to provide a market base that absorbs additional capabilities. Meanwhile, policy dividends need to be effectively converted into tangible support and form closed loop systems that span industrial chain collaborations, spanning technology research and development. Furthermore, companies need to overcome large-scale production bottlenecks and transform innovative results into stable production capacity to truly carve the location of their future landscape.