Finding the Western Edge in Battery Tech

When Europe's battery makers imported production lines from China, they got about 70% of what they needed. They got the machinery, Vera Kunz of Ahren Innovation Capital said, but not the process know-how. Then they ran it under EU labour law and hit severe yield problems. The concession came at the Ripple Vera hosted with Noah Sumait of Energy Impact Partners, in reply to a participant's hot take.

Vera had just said that the mainstream lithium-ion chemistries, NMC and LFP, are perfected in China and nearly impossible to compete on. The participant disagreed. Northvolt tried to run Chinese processes and equipment without the process engineering China had added, they said. A new manufacturing process with far fewer steps could make cells in the West at Chinese cost without tariffs, since the minerals come from the same places. Vera agreed, and found a consolation in the failures. The West now has a pool of process engineers with hard-won experience who could build the next generation of companies.

The wrong first customer

Vera said Western companies tried to copy and perfect in about five years a process that China had spent 15 years on, and chose the hardest customer to do it with. Cars demand high energy density, long cycle life and reliability above almost any other use. Noah called automotive a high-promise, low-delivery beachhead that many start-ups have not survived. Its specifications, timelines and contracts sink companies, and one participant blamed Northvolt's failure on its BMW contract. LG started with consumer electronics and moved to harder markets later. Had the West done the same, Vera said, it would not have hung on one or two customers.

The hosts had easier markets in mind. Next-generation batteries struggle with a long, reliable cycle life, but a one-way defence drone only needs energy density. "I will die on this hill. They are a good first beachhead to go after," Vera said. Humanoid robots are another, because lithium-ion packs are too heavy to keep them active for more than a couple of hours. Noah said US interest and funding have gathered around sodium-ion, which lacks the density for cars and so heads for stationary storage. That market is financed like a project, with no appetite for technology risk and no price premium, but Noah still saw sodium-ion as a possible battery of the West.

Chemistries China has not won

Vera wanted the West to stop copying chemistries China has perfected and go where the race has not been lost. Iron-air batteries rust and un-rust iron against a porous carbon electrode. Form Energy commercialised them first in the US, and a Dutch company is following. The materials are so cheap that Vera saw no inherent Chinese advantage. Solid-state cells with lithium-metal anodes have so far managed a couple of hundred reliable cycles at best, and even when that is solved Vera expects a ceiling of around 350 to 400 watt-hours. Lithium-sulfur offers a bigger step, could be cheaper to make and is close to commercialisation.

Two flow-battery founders described European routes. One makes organic molecules from commodity chemicals in ordinary chemical plants, avoiding vanadium, which Vera called expensive and toxic. The other adapts its chemistry to electrodes and membranes that European suppliers already stock, and adds capacity as demand grows. Building a gigafactory first and then chasing offtakers for two or three years, that founder said, will never be financially viable. A founder building battery control systems thought the whole discussion too focused on chemistry. At the system level, blends of chemistries and supercapacitors can serve any use, and at least five of the top ten companies are European.

I will die on this hill. They are a good first beachhead to go after.

Who owns the plants

Ownership was the other gap. A participant said only two European-controlled companies, PowerCo and ACC, make cells in Europe, around 5% of European output. The rest belong to Chinese, Korean and US firms. Noah said the US has answered with joint ventures, most recently with LG, that bring Asian know-how onto US soil. An investor said Verkor's raise of about 2 billion was roughly a third each equity, loans and grants, and that state money is what it takes if Europe wants batteries made in Europe. Noah added that the West has minerals, from German lithium to US oilfield wastewater and Latin American brines, but lacks the processing where China positioned itself.

An angel investor who mentors start-ups was gloomier. Private appetite for batteries in Europe is falling after the collapses, and some laureates report hesitancy even from the EIC's equity fund. The European Court of Auditors found that only three or four per cent of Innovation Fund money had been paid out. "What matters is acts, not talk," they said, and what funders do is their portfolio. A founder named the piece still missing. European utilities and industrial users get no support to buy European-made batteries, and their financiers see only supply-chain and technical risk. Without those buyers, the founder asked, what is the point of investing so much in factories and chemistries?

This Ripple was hosted by Vera Kunz (Ahren Innovation Capital) and Noah Sumait (Energy Impact Partners) at The Drop 2026 on 16 September.