Building a battery market outside of China
In short
Europe wants its own batteries, and its buyers will not pay extra
Sofie Käll and Burhan Pisavadi asked founders from mining to home batteries how Europe avoids another Northvolt when nobody at the table trusted the EU to help.
Asked to stand if a sovereign European battery supply chain mattered, everyone at the battery Ripple stood up. Asked to stand if they trusted the EU to deliver one within five years, nobody did. The group was mostly founders, from mining to home batteries, and the rest of the hour went on what might work without the EU. The hardest answer came from the buyers, who would not pay more for a European cell.
Sofie Käll of The Footprint Firm set the scene. Well over half of global cell supply is Chinese, and export controls on materials and equipment have become a real blockage to trade. Since January 2023 the global gigafactory pipeline has grown by about 30%, while Europe's has shrunk by about 8%. Burhan Pisavadi of PT1 said governments, the press and sovereign wealth funds now use Northvolt "as a millstone around the necks of everyone in Europe who is trying to innovate or raise funding in this space". Europe lacks the American habit of trying again, so a public failure costs everyone.
A founder who had worked in gigafactories blamed Northvolt's fall on budget control. It had been a shock, the founder said, that its management did not even know the company was going bankrupt. European quality rules are also far stricter than in the US or China, and in Europe it is legacy carmakers, not a start-up, entering the market. A founder making a battery component said their company stays out of cell making altogether, because it cannot match Chinese yields at gigawatt-hour scale.
A phone number, not a grant
When the hosts asked what the EU's role should be, no hands went up, which one of them found telling. The start-ups had views all the same. Someone building flow batteries said start-ups cannot bank on policy turning in their favour. Support should go to the customers who buy first-of-a-kind European batteries. Another wanted fewer grants and more public purchasing, because a start-up can multiply revenue ten or a hundred times but cannot do that with a grant, and tenders should not go to the cheapest bid by default. A third said financing a new factory comes down to contracts, and contrasted the US, which picks strategic industries and funds them, with Europe's scattered approach.
What frustrated a mining founder was distance. There was no EU representative at the table, and the founder wanted one who would ask what start-ups need. Theirs was a test mine and samples. Instead there are forms to fill in for grants. Asked whether start-ups lacked a channel to regulators, one founder answered, "Give me a dude I can call up." The flow-battery builder described public funders who say a project sounds good and then go silent for months.
as a millstone around the necks of everyone in Europe who is trying to innovate or raise funding in this space
No premium for a European cell
Then the buyers spoke. A founder selling home batteries sources cells from China, the one place that makes them at volume, reliably and safely, and saw no reason to pay extra for European ones. A board member in the electric-vehicle sector said that with Chinese vehicles on the market and razor-thin margins, paying a large premium was out of the question, even for buyers who want to buy European.
That board member dislikes regulation on principle, but said that without taxes on imported batteries Europe would end up with no battery production at all. At equal cost, most Europeans would buy European. Someone pointed to US import taxes on Chinese cells as evidence that tariffs work. One objection was that subsidising an industry is not sustainable. The founder with gigafactory experience replied that China does exactly that. Another participant suggested the EU may fear Chinese retaliation.
Defence was the exception. Drones and other small devices drive demand for a fully sovereign chain, participants said, and full sovereignty means accepting a price premium. Everything else will settle for some supply security, with part of the chain in Europe and some extraction elsewhere because it is cheaper.
Deeper mines or better cells
A participant building a new battery said any new attempt at scale must start from a fundamentally better product. Copying the chemistries and cell designs China already makes well is doomed to fail. The mining founder saw it the other way. Chasing chemistries is a distraction, they said, because sovereignty needs end-to-end capacity, meaning separation plants, feedstock to separate and the energy to run them. Recycling will not be enough, the founder said, citing a forecast that even by 2040 at best about 8.1% of electric vehicles could be made from recycled materials. Europe has the metals, but deeper than current technology reaches.
A new mine takes 15 to 20 years, another participant replied, while new materials can be developed faster and sold outside Europe. Someone else wanted to invest in recycling the metals already extracted. Nobody settled which path Europe should take.
One of the hosts said the lack of faith in the EU puts the onus on everyone at the table. A founder building electric logistics vehicles said the giant factories will come only if very large investors fund them for a 50-year horizon, not for venture returns within five. An investor added that the US has offtake from hyperscalers, 45X tax credits and help from its energy and defence departments, which makes European battery companies harder to back. The founder did not know who would be brave enough to write that 50-year cheque.
This Ripple was hosted by Sofie Käll (The Footprint Firm) and Burhan Pisavadi (PT1) at The Drop 2026 on 16 September.