The rising demand for batteries, particularly from the mobility sector, has led to a significant increase in the required production volume. Factors such as utilisation and production scrap ensure that the necessary production capacity must once again exceed demand.

Europe is facing an expansion in battery production capacity, not least because of its strong automotive industry. At present, Europe's share of global production capacity is only around ten percent, while its share of global battery demand is around 25 percent. As a result, the market is currently dependent on foreign cells, particularly those from China. Due to the strategic importance of batteries, for example for electric cars, many companies are interested in European cell production. A kind of gold-rush atmosphere has ensured that more than two TWh of annual production capacity has been announced by 2030.

After initial euphoria, many battery manufacturers are cancelling their plans

In view of European demand, which could be between 800 and 1300 GWh by 2030, two TWh of production capacity would mean major overcapacities. The market ramp-up of electromobility is happening somewhat more slowly than expected. In addition, increasing overcapacities in Asia are causing cell prices to fall further. Furthermore, start-up difficulties with the first European production projects dampening the mood and have also contributed to the fact that many planned projects have already been cancelled.

The challenges for European production are manifold. High energy prices and investment costs as well as a lack of production expertise represent additional hurdles. However, analyses show that Europe can position itself as an attractive production region among other things through political impetus such as the new battery regulation (including disclosure of the CO₂ footprint and requirements for battery recycling).

Delayed and failed projects in Europe

Delayed or completely cancelled battery production projects in Europe currently total more than 700 GWh. The corresponding projects in Germany alone total around 240 GWh. Responsible for this is, among others, Northvolt, whose future is unclear. The company got into difficulties due to ramp-up and quality problems as well as the withdrawal of important investors and offtake agreements. Due to overly diversified activities, the planned development and ramp-up of several construction projects could not take place as planned. Due to the current financial difficulties, it cannot be assumed that the 60 GWh in Heide will be completed as planned.

ACC's planned gigafactory in Kaiserslautern (32 GWh) is also currently on hold. This is due to the market situation, strategic decisions in favour of alternative cell chemistries and challenges in scaling up with still high scrap rates. Unlike Northvolt, ACC reacted earlier and is now focussing on production in France. It can therefore still be assumed that the production project could be continued.

Things are also going differently than originally planned at CATL in Erfurt. There, an expansion of the current gigafactory totalling 60 GWh is on hold. The status of Cellforce's gigafactory in Schwarzheide is just as unclear. This is due in particular to weak market growth. Two SVolt projects have also failed for this reason, among others, as well as due to strategic company decisions. Farasis also failed with its project in Bitterfeld for strategic reasons. Blackstone in Döbeln probably failed due to the lack of production performance in combination with financing problems.

There are also major cancellations in Sweden due to four projects with participation of Northvolt or Volvo. Overall, the future of 110 GWh of production capacity in Sweden is questionable, not including the plant in Skelefftea, which is currently still in production. In Italy, the failed and delayed projects have a total production capacity of 85 GWh. The ACC project in Termoli (40 GWh) is on hold, as is the project in Kaiserslautern, and Italovolt's plant in Scarmagno (45 GWh) has failed due to a lack of financing.

Eastern Europe's cancelled projects add up to a total of 80 GWh, as PowerCo changed its ramp-up strategy and initially prioritised production sites. In Romania, Norway and the United Kingdom, projects up to 30 GWh have failed - often due to insufficient financing or the weakening market. In Slovakia, there is a three-year delay at InoBat and Gotion (60 GWh), while in Finland the Freyr project in Vaasa remains uncertain (40 GWh).

Methodology for modelling realistic battery production capacities

In a study published by Fraunhofer ISI in February (data status 12/2024), a risk assessment model was presented that makes it possible to forecast more realistic future battery cell production capacities in Europe.

The approach combines an assessment of individual announcements at project level with a Monte Carlo simulation. Firstly, the probabilities of the implementation of various individual projects are modelled in order to subsequently calculate the cumulative production capacity in Europe.

European battery production will probably fall well short of announcements

The results of the model show that only between 54 and 75 percent of the announced capacities in Europe are likely to actually be realised, which corresponds to around 1.2 TWh to 1.7 TWh by 2030. With the assumed delays in construction projects and lower output in the factories due to production rejects and capacity utilisation, this means a realistic production output of 0.8 to 1.1 TWh in 2030. 

For these calculations, eleven risk factors were identified in the study, which are used to assess the likelihood of realisation for different battery production projects in Europe. The individual announcements are analysed regarding the various risk factors:

• The overriding consideration is how far the announcement is in terms of realisation. The more advanced the project is (e.g. if the factory is already under construction), the more likely it is to be realised.
• Company factors such as company size, financial position, existing supply relationships or purchase guarantees from battery manufacturers, as well as the already proven ability to build batteries on a large scale, play into the credibility of the company.
• Country factors, such as energy and labour costs or the availability of supply industries in the form of material and raw material production, have an impact on the attractiveness of the location.
• The announcement itself is also characterised. Among other things, a specific site selection is assessed, as well as the planning details (e.g. whether an optional or definitive capacity expansion was communicated).

A classification of each individual announcement for all factors enables a well-founded risk analysis and thus an assessment of future European cell production.

The majority of production projects (66 percent) are currently still in the planning phase, with Germany, France, Scandinavia and Eastern Europe considered hotspots for the announced capacities. Despite challenges as mentioned above, the trend shows a growing share of European cell production compared to global production figures.

In summary, Europe's dependence on imported cells is likely to decrease. With a clear focus on technological sovereignty and the need to become more independent of imports from China, Europe is positioning itself as a promising location for battery cell production despite the current sluggishness.

More info

For detailed information and a comprehensive analysis of the results, please refer to the full publication: Wicke, T.; Weymann, L.; Neef, C.; Tübke, J. (2025): Forecasting Battery Cell Production in Europe: A Risk Assessment Model. Batteries, 11, 76. 

The data used in this article comes from the "BEMA On" (grant number 03XP0621A) research project, which is funded by the German Federal Ministry of Education and Research.