More than 250 new plants of battery producers and their suppliers will be established in Europe in the next 10 years. As new electric vehicles will become more and more mandatory and in combination with the wish to become less dependent on Chinese battery producers, the need to produce batteries locally will lead to a surge of new production plants and distribution centers of battery producers and their suppliers in Europe.
That concludes international consulting firm Buck Consultants International in an analysis of the future European batteries market, presented today at the Transport Logistic exhibition in Munich.
The worldwide batteries market is expected to grow 800 per cent in the next 5 years, with an increasing share produced in Europe (mainly lithium-ion). “As there is a substantial disconnect between Europe’s electric vehicles ambitions and current batteries manufacturing capacity, we expect a wave of new plants. Not only from the battery manufacturers themselves like CATL, BYD, LG and Panasonic. But also from their suppliers, the producers of for example anodes, cathodes, separators and battery management systems”, says René Buck, CEO of Buck Consultants International.
Based on its global location advisory practice, BCI recognizes 7 key location requirements for companies in the battery value chain:
As far as incentives are concerned the USA has taken the lead with high incentives and tax credits available under President Biden’s Inflation Reduction Act. Europe’s reaction with IPCEI (Important Project of Common European Interest) is seen as less attractive at the moment by batteries companies. IPCEI is a European program to develop a competitive, innovative and sustainable battery value chain in the EU allowing national governments to incentivize companies to establish battery plants, as an exception to maximum state aid rules.
For European suppliers to the batteries companies and logistics services providers this is a huge new market. Cities and regions who want to develop themselves into battery hot spots have to make a detailed Battery Cluster Development Plan, according to Eric Mekenkamp, principal consultant at Buck Consultants International. “A successful business plan starts with an analysis what the region really has to offer for various parties in the whole value chain. The plan should include among others technologic co-operation possibilities with universities, a realistic labor market analysis, an overview of small and large sites for potential investors and a tailormade marketing plan focused on specific target groups”.