The Electric Stack: Who Wins?

A software company that works with Chinese equipment makers got an unusual request from them. They wanted it to supply a piece of Western hardware to handle all communication with utilities, so that nobody could say the Chinese were spying. An investor told the story at the Ripple on the electric stack, and it pointed to where several at the table thought Europe could compete. China builds most of the hardware. The layer that controls it is still open.

Jonas Bergqvist of Almi Invest GreenTech called the electric stack the best lens on today's technology shifts. The concept, which Jonas took from recent writing including a long January 2026 essay called The Electric Slide, combines batteries, magnets, electric motors, power electronics and embedded compute. Industrial power once came from railways, steel, cars and computers, Jonas said, and it now comes from this stack, from its components and from how they combine. Daniel Uusitalo of 4impact Capital pointed to BYD, which owns its stack from refined minerals to finished cars and so has flexibility across its value chain. Europe has nothing like it. Daniel added that EU rules might soon restrict buying a Chinese battery system whose controller was also developed in China.

One layer, chosen dependencies

Founders described how they had picked a layer and chosen which dependencies to live with. One building electric propulsion for ships makes its own motor, inverter and controls, and designed out every single-source supplier and every Chinese critical component except magnets. That, the founder said, is where someone could pull the plug. The company is too small to buy stock years ahead.

A flow-battery maker went the other way. It focuses on its battery stacks, electrolyte and battery management, and uses standard communication protocols so that any energy management software can run it. For a team of chemists and engineers, going into software would be suicidal, and energy management differs too much by country. Some customers want a fully European system, one battery maker said, so its hardware is designed to work with whichever European inverter fits. A founder building organic flow batteries said their raw materials come from petrochemicals available in almost every European country. Their open question was whether they can manufacture competitively in Europe or will need China.

One of the hosts summed it up. Advantage comes from specialising and commoditising everything that is not central to the product.

Everyone is talking about it, but no one is willing to pay the premium that's needed for it.

Let them build, let us control

The control layer drew the most interest. A co-founder building autonomous operation for batteries and solar said their software sits on top of hardware from any producer, China included, so that the data stays in the EU and European players hold control. "Let them build, let us control," the co-founder said of the race against China.

Chinese manufacturers seem to be moving that way themselves. A founder whose software connects batteries, wind turbines and solar to the grid said Chinese OEMs have concluded that playing in Europe needs local software, and are stepping back from that layer and approving European tech companies instead. Western OEMs, meanwhile, struggle to reach the scale to do it all themselves. An investor raised the long tail. A carmaker selling 100 cars a year in Luxembourg is unlikely to build every utility integration itself. A founder doing energy management for electric-truck fleets said cloud software alone is not enough behind the meter, so the company is adding local controllers and plans to move up into aggregating energy for the grid.

Daniel asked who holds power when a battery maker enters Europe, the maker or the integrator it needs. A participant whose company works with most Swedish utilities said new entrants now seek it out for that access, and the balance has shifted its way. Another participant said stricter grid codes favour the large engineering contractors who can comply at utility scale, leaving power divided. Incumbents such as ABB and Siemens are active, someone added, but slow to take up start-ups' technology.

Who pays for resilience

The money was harder. "Everyone is talking about it, but no one is willing to pay the premium that's needed for it," one founder said of European resilience, and the same goes for manufacturing on European soil. A growth investor said their fund had looked hard at grid-flexibility start-ups without gaining much conviction. In homes, value went to retailers integrated up to selling electricity, such as Octopus. Commercial and industrial sites are siloed, and profit-sharing limits the utility-scale market. The fund now spends most of its time on data centres. One of the hosts agreed that software plays are harder, because the hardware underneath moves slowly and differs by geography. Flexibility is well built out in the Nordics and much less so in most of Europe.

Late on, Daniel asked whether EU rules requiring European control components in critical infrastructure could backfire as protectionism. An investor put a number on the prize. In solar plants above 100 kilowatts, the controller is only 2–5% of the capex, so Europe can do more than that. Another participant said full sovereignty in production is not feasible, and even batteries are a goal many have given up on. If Europe commits to depending on China, the participant said, it should make sure China depends on Europe too. Then, if China froze exports of graphite or magnets, Europe would have something to put against it.

This Ripple was hosted by Daniel Uusitalo (4impact Capital) and Jonas Bergqvist (Almi Invest GreenTech) at The Drop 2026 on 16 September.