Europe Is Learning an Uncomfortable Truth About Local Battery Production
Mar 2nd 2026
A run of cancellations and cost pressures shows Europe is struggling to compete with China on battery manufacturing, forcing policymakers and automakers to balance industrial sovereignty with the need for affordable electric vehicles.
- Several high profile European battery projects have been canceled, scaled back, or delayed in the past two years.
- China controls most of the battery supply chain and produces the lowest cost lithium iron phosphate batteries at scale.
- Automakers say they must import cheaper batteries to keep electric vehicles affordable for consumers.
- Examples include Porsche scaling back Cellforce, Northvolt filing for bankruptcy in 2024, and Automotive Cells Company shelving two planned plants.
- Volkswagen’s Salzgitter plant now has about 20 gigawatt-hours of annual capacity but relies on manufacturing tools imported mainly from Asia.
- The EU has pledged support, including a €1.8 billion interest free loan program called Battery Booster, to try to build local cell production.
- The United States saw a surge in battery project announcements after the Inflation Reduction Act, with some projects later delayed, canceled, or repurposed