March 10, 2025 • 5 mins read
While Europe talks, Asia builds: eight key lessons for scaling Europe’s battery industry
Dave OudeNijeweme
“I see no fundamental barriers to a localized battery1 supply chain in Europe,” starts Dave OudeNijeweme, Senior Director of Battery Materials – Growth.
Batteries are vital for Europe’s energy transition, but limited access to materials, rising energy costs, high construction (CAPEX) costs and increasing competition from abroad are limiting growth. “Scaling battery production to meet future demand remains a challenge,” says OudeNijeweme. “This is especially true as Europe works to reduce its reliance on imports and improve competitiveness in a market dominated by Asian players.”
Europe’s (re)positioning in the global battery race
Following negative growth in 2024, there’s an expectation Europe will see renewed investment interest in both electric vehicle (EV) sales and its battery supply chain in 2025. This shift is partially driven by uncertainties around future US policies on EVs and battery manufacturing, which may influence global manufacturers to look for more stable and supportive environments.
“In response, Europe is repositioning itself as an attractive destination for investment, with policies aimed at strengthening its battery manufacturing capabilities,” says OudeNijeweme. “These efforts include funding for research and development, as well as providing incentives for companies to establish production facilities within Europe.”
The question is whether Europe can succeed in its second attempt – building on past commitments like the European Investment Bank’s (EIB) €3 billion investment in 2019 and the EU’s Important Projects of Common European Interest (IPCEI) initiative – and whether stronger collaboration between policymakers and supply chain players can pave the way forward.
“To answer, we must move beyond the familiar challenges – EV sales, policy settings, commodity prices, and technology hurdles. These are known variables that must be factored into any strategy,” says OudeNijeweme.
The real obstacles emerge once the plan is in motion.
“The real obstacles emerge once the plan is in motion. The reality is that projects in Europe are three time as expensive than in Asia, take longer to get up and running and when they do, the result is often far from ideal.”
We have summarized our experience into eight major pitfalls for the battery industry, all of which are de-riskable with the right strategic approach.
Eight learnings and what’s required to maximize future success
- “Too often we observe an under appreciation of scale-up methodologies,” says OudeNijeweme. Scaling up any technology is filled with risks and in the rush to accelerate first revenue, companies can fail to adopt a structured methodology, or seek to skip steps to bring production online faster. “Ultimately, this is counterproductive,” warns OudeNijeweme. “We have seen this lead to changes and delays as full-scale battery facilities are being designed, constructed or commissioned. Without the right methodology, costs and schedule spiral, and you risk a billion-euro stranded asset.” Well established practices exist to address scale-up challenges, guiding smooth, risk-based transitions from pilot, to demo, to full-scale production.
- Innovation is essential in the lab, but making technology changes after major capital investments and detailed engineering introduces significant risks. “Many leadership teams underestimate the impact of late-stage ‘improvements’,” says OudeNijeweme, often leading to quality issues, cost overruns, and schedule disruptions.” To stay competitive, companies need to exercise discipline, much like the automotive sector, where stability after design finalization is key to delivering projects on time, within budget, and to specification. “However, balancing ‘design optimization’ with ‘continuous development’ requires skilled engineering oversight to allow flexibility while effectively managing and communicating the impact of changes,” says OudeNijeweme.
- To scale battery manufacturing, we need effective collaboration across the equipment supply chain. While transactional procurement works for commoditized equipment, it falls short for specialized systems like Roller Hearth Kilns – essential for thermal treatment in cathode and anode processes with long lead times and few suppliers. Sudden demand spikes or spec changes create bottlenecks, delaying production. The role of key equipment in execution timelines and product quality cannot be underestimated. Shifting from ‘transactional purchasing’ to ‘relationship-based supply chain management’ between the owner, engineering partner, and vendor can reduce costs, shorten schedules, and mitigate risks.
- Clear, realistic timelines are essential at every project stage. While speed to market is important, unrealistic schedules – often driven by poor advice or offtake agreements – create schedule stress, leading to suboptimal outcomes. Design shortcuts, poorly defined equipment, and major rework often cause delays. Stronger upfront planning, engineering, and schedule precision – guided by experienced teams – enhance execution, boost investor confidence, and improve delivery reliability. Disciplined project execution and effective risk management are key to staying on budget and on schedule.
- Failing to plan for plant ramp-up to nameplate capacity directly impacts profitability. “We’ve been called in to de-bottleneck plants stuck at low capacity or high scrap rates –costing tens of millions daily. Even seasoned executives cringe at such losses,” says OudeNijeweme. Allowing sufficient time for an expert commissioning team is crucial. A team of customer, equipment supplier, and engineering partner can accelerate production safely while training operators for a smooth handover, ensuring long-term success.
- Location choice and nearby construction activity can drive inflationary impacts on costs, labor availability, and build quality. Industry incentives in Hungary led to fierce competition for skilled labor and equipment, while Northern Sweden's remote sites faced workforce shortages, winter road challenges, and rising costs. Experienced owners conduct thorough site studies – not just for operations but also to ensure projects can be built on time and within budget, accounting for inflationary pressures.
- Environmental scrutiny and waste stream management regulations are tightening, adding complexity for manufacturers. Several projects have demonstrated that addressing these early – especially waste like sodium sulphate – through innovative engineering is key, requiring a skilled partner with a full grasp of local requirements and the ability to adapt designs accordingly. This is particularly pertinent for non-European investors adapting technology to local standards. Some projects have even found ways to monetize by-products and create synergies with nearby industries.
- The above delivery challenges are symptomatic of the underlying problem: Europe’s battery industry faces a significant skills gap as it works to build production capacity. “We’ve seen this in owner teams new to large-scale battery projects and in organizations stretching beyond their capacity, lacking the governance to manage billion-euro investments,” says OudeNijeweme. The challenge is widely recognized, with the 2024 Volta Report highlighting high demand for expertise in process engineering and scaling production.
Looking ahead: a vision for the future
“The EU is targeting a battery production capacity of about 500 GWh by 2030,” says OudeNijeweme. “This means the region needs to more than quadruple its battery and battery component production capacity.”
Europe’s window of opportunity is quickly closing, and without substantial investments in both learning and financial resources, the region risks falling further behind. Failing to establish a locally integrated value chain, where most of the value is created, would undermine the competitiveness of any industry. “Moreover, a truly circular economy – essential for both economic and environmental sustainability – will remain a dream,” says OudeNijeweme.
There’s no point tinkering with tomorrow’s technology if you can’t build today’s.
“This challenge is not just about throwing money at the problem; it’s about addressing the fact that little has been built so far,” continues OudeNijeweme. “There’s no point tinkering with tomorrow’s technology if you can’t build today’s.”
“Some humility would go a long way, and we include ourselves in that acknowledgment,” says OudeNijeweme. “It’s essential to recognize gaps and leverage expertise where it exists.” By collaborating honestly and jointly travelling down the learning curve, we can deliver plants that are cost-effective, on schedule, and reach nameplate capacity. No single entity possesses all the skills needed in this growing industry. “By pooling collective experience, Europe still has the chance to establish itself as a key player in the battery sector, one successful battery materials plant at a time.”
1 Throughout this article, ‘Batteries’, ‘Battery production/manufacturing’ and ‘Battery supply chain’ refers to the combined industrial activity to produce batteries, cathode material, anode material and other critical battery components. (Back to text)
