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To date, the LIB cell manufacturing market is dominated by three countries: China, South Korea, and the United States. Two thirds of global LIB cell production takes place in China, and respectively 13% in South Korea and the US [1]. Europe is currently taking only a marginal role, with less than 1% of global production. Nevertheless, numerous investments in new facilities can be noticed, and the European share of worldwide battery production is projected to grow strongly in the upcoming years, to up to 18% of global LIB production by 2029 [2]. Until 2023, production capacity will increase by more than tenfold, both through investments of Asian and US companies (e.g. LG Chem in Poland and CATL in Germany) as well as through new European players (e.g. Northvolt in Sweden). 

 

Because market incentives such as access to skilled labor and capital are not homogeneously spread across Europe, regions and countries with stronger economies (e.g. Germany) have experienced faster growth of a local LIB industry. Nonetheless, nations with specific competitive advantages such as strategic geographical location and lower wages (e.g. Poland) have also enjoyed a significant inflow of investments in the sector.

Building up a European battery production could positively impact the global market due to the high standards on environmental protection and working conditions required inside the EU. At the same time, more stringent requirements may represent a competitive disadvantage in the global market. It will be essential for Brussels to create a regulatory framework that subjects imported batteries to comply with the local standards. The main advantage of Europe lies in its strong automotive sector, which has the financial means to foster a quick upscale of European battery production.

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References:

[1]    J. Huisman, T. Ciuta, F. Mathieux, S. Bobba, K. Georgitzikis, D. Pennington, “RMIS – Raw Materials in the Battery Value Chain,” Joint Research Institute (JRC) of the European Commission, 2020.
[2]    “Battery industry development: Europe is gaining momentum - European Battery Alliance,” European Battery Alliance, Mar. 25, 2020. https://www.eba250.com/battery-industry-development-europe-is-gaining-momentum/ (accessed Apr. 16, 2020).
[3]    Tsiropoulos I., Tarvydas. D., Lebedeva N., “Li-ion batteries for mobility and stationary storage applications,” Joint Research Institute (JRC) of the European Commission, 2018.
[4]    M. Hall, “EU lender pitches in for LG Chem battery gigafactory in Poland,” pv magazine International, Nov. 08, 2019. https://www.pv-magazine.com/2019/11/08/eu-lender-pitches-in-for-lg-chem-battery-gigafactory-in-poland/ (accessed Apr. 20, 2020).
[5]    M. Kane, “Farasis Energy To Build 6-10 GWh Battery Plant In Germany,” InsideEVs, May 10, 2019. https://insideevs.com/news/348957/farasis-build-battery-plant-germany/ (accessed Apr. 20, 2020).