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August 13, 2020

European battery makers more likely to eye niches – report

European battery makers are gearing up to take advantage of massive green stimulus packages unveiled since the coronavirus pandemic though many acknowledge it will be tough to match the Asian giants that dominate the mainstream market, a Reuters report said.

By Olly Wehring

European battery makers are gearing up to take advantage of massive green stimulus packages unveiled since the coronavirus pandemic though many acknowledge it will be tough to match the Asian giants that dominate the mainstream market, a Reuters report said.

The news agency said Sweden's Northvolt and, more recently, France's Verkor, were eyeing large scale production while other European companies were focusing on niche markets and new technology rather than taking on Chinese and South Korean firms with mass production of EV batteries.

Smaller firms told the news agency the challenge of building economies of scale fast to compete head on meant finding niches was a more likely path to success, for now.

"Having battery giants in Europe, it's still possible," said Sunlight chief executive Lampros Bisalas. "We just need to run and catch up and innovate faster than the others."

According to Reuters, its Greek factory is the world's largest producer of lead acid batteries for automated guided vehicles, forklifts and energy storage systems and it is now shifting to lithium cells.

Instead of competing in the EV market dominated by CATL, Panasonic, LG Chem, Samsung SDI and SK Innovation, Sunlight focuses on lithium-iron-phosphate (LFP) production, a type of battery suited to forklifts, locomotives and robots that perform short tasks with breaks in between.

"These markets are billions of dollars," said Bisalas. "We see a very big opportunity there, because we see lithium ion producers, especially from China, being focused on EVs."

Reuters noted China hosts 80% of the world's lithium-ion cell production – what EVs use mostly – and most of the capacity coming online in Europe over the next five years belongs to the Asian firms.

The report said researchers had already identified 13 European battery projects that could be eligible for EU support, in countries including France, Germany, Slovakia and Poland – though some were being driven by Asian manufacturers, such as LG Chem's plans to expand its factory in Krakow.

European EV production was expected to increase six-fold in the next five years and EU leaders expected the battery value chain – from mining to production to recycling – would be worth EUR250bn by 2025.

But some European startups concede they can't catch up with the large scale, low cost Asian incumbents, Reuters added.

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