European companies want to regain lost ground and accelerate the construction of battery factories against China and Japan

British media said that the Swedish startup Northvolt, which plans to produce lithium-ion batteries, announced on April 27 that it would spend 100 million Euros to build a demonstration production line and research facility in the Swedish city of Vasteras. Peter Calsson, founder and CEO of the company, said the facility was "the first step in our long journey": building a plant capable of producing 32GWh of lithium-ion batteries would put it up against the Asian giants that dominate the battery race.

According to the British "Financial Times" website reported on April 30, Northvolt is one of the 80 stakeholders of the European Battery Alliance. The alliance was initiated by Marosshevovic, the European Commission's vice president of energy affairs, last year to accelerate the production of batteries in the European Union.

Officials believe that battery technology is a strategic need in Europe. Europe has not yet succeeded in building a number of digital technology giants like the US, and its early leading position in solar panel production has been surpassed by Chinese companies.

According to the report, if one of the most important industries in Europe wants to get out of the shadow of the popular "diesel door" scandal and maintain the core position of the region in the industrial base, the development of automotive battery technology is particularly important.

Shevovich said: "If the engine of the internal combustion engine is the most valuable part of the car, then the battery and software will be in the future."

Electrification of transportation is an important part of the EU's implementation of the Paris climate agreement. Some European cities with worrying air quality are considering prohibiting traditional internal combustion engine vehicles.

Batteries also need to be used to store energy because the power generation industry is rapidly abandoning fossil fuels and relying more on intermittent renewable energy.

According to Goldman Sachs, by the end of 2030, global demand for automotive batteries is estimated to rise from less than $10 billion to $60 billion. Benchmark Mining Intelligence is a research organization that monitors the lithium-ion battery market. Simon Moores, head of the company, said that Matsushita Electric Industrial Co., Ltd. is the world's largest battery manufacturer, and more than half of the new battery plants are built in China. Goldman Sachs expects Asian companies to continue to dominate this market.

The report said that European companies are trying to recover lost ground. The EU's initiatives include companies throughout the supply chain: BASF and Belgian chemical group Solvay, European automakers Volkswagen, BMW, Mercedes-Benz and Renault, and the German conglomerate Siemens. In addition to Northvolt, the German consortium TerraE and the French battery manufacturer Saft also plan to build a battery factory in Europe.

Shevovich said that the European Battery Alliance "has brought many promising commercial projects, and Northvolt is just one of them." He said: "People's market forecast for 2025 is gradually becoming a reality. I think investors should know that European battery projects are worth investing."

According to reports, Asian competitors are also building factories in Europe. South Korea's LG Chemical is building a large lithium-ion battery plant in Poland. Samsung SDI and SK Innovation are investing in Hungary.

Carlsson was an executive at Tesla Motors. He said that the EU's initiative helps people understand that the European continent needs "a battery ecosystem." He said that the European Investment Bank and the European Commission are "a key part of ensuring the first phase (financing) for us." Northvolt also needs an additional 1.5 billion Euros to start building factories in another part of Sweden as planned.

The report said that on April 27, the company announced a partnership with Nimaska Lithium to secure battery-grade lithium hydroxide. Ensuring the supply of cobalt and lithium is a major concern for battery manufacturers today, but in the long run, rising prices may drive investment to new mines.

Shefovich welcomed Northvolt's plans and acknowledged that there is still much work to be done to achieve Europe's ambitious industrial and climate goals.

He said that I hope that Europe (from now on) will have such good news every quarter or every half year, because people need 10 to 20 "Gigabit factories" in Europe (Tesla built battery factory, planned annual production capacity up to 35GWh).

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