Europe’s Battery Localization Hits a Cost Barrier Against China
Europe’s push to localize EV battery production is faltering as cheaper Chinese batteries and a mature supply chain dominate costs, prompting cancellations and delays of major projects (Northvolt’s 2024 bankruptcy; Porsche Cellforce scaling back; Automotive Cells Company shelving German/Italian plants). Despite surging EV demand, Europe remains reliant on Chinese materials and equipment, especially for LFP chemistry. EU policy moves like Battery Booster aim to spur domestic cell manufacturing and critical-mineral sourcing, echoing the US IRA, but affordability keeps imports in play. VW’s PowerCo plant in Salzgitter is expanding, though most tooling still comes from Asia. The outcome could set a blueprint for others if Europe can achieve real competitiveness and independence.
