For a long time, the battery market was considered a prime example of a sustainable industry in Europe. The demand for e-mobility, energy storage, and smart devices seemed limitless—as did the growth forecasts. Start-ups such as Northvolt and Britishvolt made headlines, major car manufacturers established their own battery subsidiaries, and subsidies flowed freely. Since then, the mood has changed noticeably: where there was once euphoria, disillusionment is now spreading, and many highly publicized projects have long since fallen victim to budget cuts. enomyc experts Dr. Stefan Frings and Robert Schröder explain what needs to happen for Europe's battery vision to become a reality after all.
For a long time, China was considered the extended workbench of the West—inexpensive, efficient, but lacking its own innovative strength. In battery technology, the tide has long since turned: Asian manufacturers dominate the global large-scale production of battery cells—whether for electric vehicles, stationary storage, or mobile devices. European companies were initially overwhelmed by this development. Since the mid-2010s at the latest, a number of new companies and joint ventures have been established. Names such as Northvolt, Verkor, Italvolt and InoBat symbolise Europe's entry into the world of gigafactories.
The majority of battery cells produced worldwide – around 80 per cent – are supplied directly to the automotive industry. The remaining 20 percent is spread across niche markets such as consumer electronics, e-bikes, energy storage, and industrial applications. While global demand for electric vehicles grew by 25 percent to more than 17 million vehicles in 2024, Europe – and Germany in particular – experienced a severe setback: The slump in new registrations by almost a third in just one year is setting alarm bells ringing. This is a serious setback for an industry that depends on stable sales markets and economies of scale.
As a result, most of the originally ambitious plans to expand production capacities have been gradually scaled back or scrapped altogether. While Fraunhofer ISI once predicted an output of up to 1.5 TWh by 2030, 1 TWh now seems a more realistic target.
European battery production: Strong in research, weak in manufacturing
The European vision was clear: a strong, independent European battery industry that scores highly in terms of sustainability and quality. But the road to get there is rockier than expected. Although European R&D departments excel in the laboratory, the transition to industrial series production reveals massive weaknesses: high reject rates, inconsistent quality, and an insufficient understanding of the complex production processes—in which hundreds of parameters must be finely tuned—often lead to costly delays in ramping up production.
In addition, German and European manufacturers are heavily dependent on Asian machinery – as well as on the know-how of the associated specialist personnel – in order to establish domestic production. Without their technology and expertise, European players find it difficult to establish scalable and competitive production processes. This shows that the goal of technological sovereignty lacks a solid foundation.
The current macroeconomic conditions are further exacerbating the situation. New global trade tariffs, high interest rates, a weak economy, and hesitant investor behavior are putting young companies in particular under pressure. They lack the necessary liquidity to drive innovation or develop new locations. Many start-ups are struggling to survive, even though their technologies actually have the potential to make Europe's battery industry more independent and sustainable.
Strategies for a fresh start: Three ways out of the crisis
Despite all the hurdles, the European dream of battery production is far from over. What is needed now is a breath of fresh air and a clear strategic realignment.
The following three levers have the potential to turn the current crisis into an opportunity for the future:
- Tap into new markets: Diversification & internationalization
• By focusing on niche markets such as medical technology, aviation, or stationary energy storage, battery manufacturers can reduce their dependence on the automotive industry. • Some of these markets are less price-sensitive or offer faster market access because they have lower technological barriers.
• International sales markets, especially in Asia, India, and Australia, also offer enormous growth potential. European suppliers can score points with quality and reliability and strengthen their market position by establishing an early presence in these regions.
- Leverage and expand technological leadership: innovation, software, and expertise
• The transition to alternative cell chemistries such as sodium-ion or solid-state batteries opens up new opportunities for technological differentiation. Early investment in research and collaboration with scientific partners is crucial to achieving sustainable competitive advantages.
• Battery management systems (BMS) are becoming a key technology for efficiency and service life. Companies that build up software expertise and offer intelligent, interoperable software solutions can establish themselves as system providers and tap into additional sources of revenue.
• Process optimization and quality assurance (operational excellence) not only reduce scrap rates but also ensure long-term economic stability. Those who master cause-and-effect relationships in production can control processes more efficiently, produce batteries with consistent quality, and thus improve customer satisfaction in the long term.
- Strengthen structural resilience: Deepen and vertically integrate value chains
• Securing raw material supplies through investments or joint ventures in mining protects against price fluctuations and supply bottlenecks. This vertical integration in raw materials improves planning reliability and strengthens the negotiating position in an increasingly geopolitically influenced market.
• Building up in-house machine expertise can also help reduce dependence on Asian equipment suppliers. European suppliers benefit from shorter delivery routes, better service, and technical coordination with local requirements—a strategic advantage over the competition.
• Keep an eye on classic management tasks: Solid commercial management, realistic planning approaches, and stable financing are important building blocks for securing innovative and international business models in particular.
What is needed now is courage and smart decisions
The European battery market is at a turning point. The euphoria of the early years has faded, but the potential remains. In the long term, demand for high-performance batteries will continue to rise, and groundbreaking technologies such as sodium-ion or solid-state batteries could revolutionize the industry.
Companies that rethink their strategies now, tap into niche markets, and invest specifically in research will lay the foundation for sustainable success. At the same time, the vertical integration of raw materials and machinery and the optimization of processes offer opportunities to cut costs and reduce risks.
In this complex environment, sound strategies, reliable planning calculations, and solid financing are essential. This is exactly where enomyc supports companies along the entire value chain: from restructuring and transformation to transactions.
With our comprehensive expertise in industrial transformation processes, supply chain security, and targeted growth financing, we know the levers that battery manufacturers in Europe are now strengthening. Especially in times of geopolitical uncertainty and economic turmoil, we help build resilience, leverage efficiency potential, and position companies for the future.
Let's work together to identify and seize opportunities in difficult markets. Europe's battery industry needs smart decisions – and reliable partners.
