After Northvolt, Europe's battery hopes rely heavily on China

Nick Carey - Reuters - 20/12
Northvolt's financial collapse has not entirely crushed Europe's dream of developing its own electric vehicle batteries but fulfilling it is likely to require Chinese cash and expertise.
  • Northvolt's collapse was a blow to Europe's battery industry
  • Future growth may depend on Chinese investment and know-how
  • Joint ventures with Chinese battery makers could become the norm
VODERADY, Slovakia, Dec 20 (Reuters) - Northvolt's financial collapse has not entirely crushed Europe's dream of developing its own electric vehicle batteries but fulfilling it is likely to require Chinese cash and expertise.
InoBat CEO Marian Bocek's Slovakian start-up had to work hard to secure funding until China's fifth-largest battery maker Gotion (002074.SZ), opens new tab bought a 25% stake last year and formed a joint venture with InoBat to build European gigafactories.
On Friday, InoBat announced 100 million euros ($104 million) in Series C funding, taking its total raised to well over 400 million euros.
Coming just weeks after Northvolt's downfall, the investment shows European EV battery projects can still raise money.
But instead of an independent European industry, the norm in future may be joint ventures that likewise rely on China's low-margin EV battery dominance, according to interviews with a dozen executives, investors and analysts.
They cited the Gotion-InoBat Batteries (GIB) tie-up and a deal announced last week between Stellantis (STLAM.MI), opens new tab and CATL (300750.SZ), opens new tab.
Battery startups are "just not the flavour of the month," said Lacie Midgely, a research analyst at UK investment bank Panmure Liberum. "Institutional investors are looking for strategic investors before they'll get on board."
In 2023, Hefei-based Gotion had around 150 gigawatt hours (GWh) of nominal battery capacity, enough to produce batteries for between 1.5 million and 2 million cars.
Morningstar analyst Vincent Sun forecasts it should hit 270 GWh in 2025 - dwarfing Europe's current capacity.
"It made a big difference that InoBat has a partner like Gotion on board," said Vikram Gourineni, executive director at Indian battery maker Amara Raja (AMAR.NS), opens new tab, a lead investor in InoBat's Series C round. Amara Raja also participated in InoBat's Series B round and has signed a licensing deal for GIB battery technology...
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