Europe has been making strides to prepare for a future of electric vehicles (EVs) this year, with more and more gigafactories announced every month, in a bid to rival Asian players for control over battery production. 

Several large-scale ambitious gigafactory projects have been announced in the first half of 2021. In July, Nissan partnered with Envision to invest £1bn to develop an EV manufacturing hub in Sunderland, in which Envision’s gigafactory will produce batteries for Nissan’s new all-electric vehicle. In June, Swedish cell manufacturer Northvolt raised $2.75bn in equity to kick off production and ramp up research and development efforts. In March, Volkswagen announced its plans to construct six gigafactories across Europe, each with a production capacity of 40 gigawatt hours.


Iñigo Careaga, business analyst at CIC EnergiGUNE, a research centre benchmarking gigafactory developments across Europe, tells fDi that the continent is currently in “the eye of the storm”, with more gigafactories expected to be announced before the end of the year.

Biggest EV market

Europe overtook China as the world’s biggest EV market in 2020, according to data from, as sales jumped 137% year-on-year to roughly 1.4 million. By contrast, China sold 1.3 million EV cars last year, up 12% on the previous year.

Maroš Šefčovič, vice president of the European Commission and the person in charge of the European Battery Alliance (EBA), a public–private network aimed at building Europe’s battery production, said in a recent statement that he was “glad to see that Europe continues to be a global hotspot for battery investment”. He expects the continent will manufacture enough battery cells each year by 2025 to power at least six million electric cars.

“We all agree that the EBA is crucial to bolster Europe’s resilience and strategic autonomy in key industrial ecosystems, notably by reducing our dependency on third countries, such as China and South Korea,” Mr Šefčovič said.

The EU announced last year that it aims to have at least 30 million zero-emission cars on European roads by 2030.


Still a long way off

While it was overtaken this year by EV sales, China is set to strengthen its lead in battery production as it increases its production by an estimated 251.4% per year to 1.996 terrawatt hours (TWh) by 2025, according to Benchmark Mineral Intelligence. 

And in spite of the reinforced demand bolstered by European government plans to ban internal combustion engines by 2030, concerns abound over whether the continent’s supply of batteries can keep up.

A 2019 McKinsey report predicts that by 2040, Europe will have to develop some 80 gigafactories to meet a battery demand of 1.2TWh per year. As of the end of July, the number of announced gigafactories in Europe stands at roughly half of that.

Even accounting for the announcements of more projects by the end of 2021, it is unlikely to come near the 80 gigafactories needed, says Mr Careaga. 

Oliver Montique, an automotive industry analyst at Fitch Solutions, says that “in terms of rivalling China or reaching self-sufficiency, we’re still a very long way off as a continent”.

But he remarks that the development of Europe’s battery production will be helped by the inclusion of foreign players. 

“Europe has a nice mix of battery producers, with established Asian players like LG Chem and SK Innovation, alongside fast-growth start-ups like Northvolt. With a landscape that changes every 18 months or so, it’s important to have as much expertise as possible,” Mr Montique adds.

This article first appeared in the August/September print edition of fDi Intelligence. To see a map of all the EV batteries facilities being proposed or developed in Europe view a digital edition of the magazine here.