Comment Why Do We Keep Running Into the Same Wall?

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Varta, Northvolt, CustomCells. The list of battery bankruptcies is long. And yet: Europe is once again investing in battery cell production. Once again with grand words, public funds, and the promise of technological sovereignty.

Northvolt is pulling back, projects are being frozen. Varta is fighting for survival. Other cell factories have failed before achieving any significant production. The causes are well known: high energy costs, lack of scaling, massive Asian competition, decades of lagging behind. None of this is new. Nevertheless, investments continue as if a structural problem could be solved with even more money.

Europe is attempting to copy an industrial model that emerged under completely different conditions. In Asia, state industrial policy, cheap energy, controlled raw material chains, and extreme economies of scale come together. Europe brings hardly any of that, except for funding programs and hope.

Of course, it can be argued that it is not about profit but about know-how, resilience, and strategic security. However, this argument becomes implausible when the illusion is simultaneously perpetuated that competitive mass production can be established in the foreseeable future. That is not realism; that is wishful thinking.

The real question is therefore not: Does Europe need battery technology? But rather: Why cling specifically to cell production as a symbol, even though it is the most expensive and riskiest part of the value chain?

Europe is strong in mechanical engineering, process quality, automation, specialty chemicals, recycling, standardization, and system integration. These are the realistic levers to focus on. Instead, efforts are repeatedly made to occupy the endpoint of the chain—where price pressure is highest and leeway is minimal. This is also the case in Münster, where Dorothee Bär inaugurated the first construction phase of the research factory "FFB PreFab." A "seamless process chain with exclusively European equipment technology" has been implemented there. Of course, that sounds promising. But if electricity for production is not affordable and raw materials continue to come from China, it is questionable whether there will ever be a European factory capable of withstanding the price competition.

Another point is often overlooked: the systematic price decline driven by state subsidies in China. There, battery cell production is not primarily seen as a business project but as an industrial policy tool. Low energy prices, direct and indirect subsidies, state-controlled credit allocation, and managed supply chains ensure prices that market-oriented European companies cannot compete with.

The outcome is predictable. Independent European production will be structurally too expensive, regardless of how efficiently it is organized. Failure in this environment is not a sign of poor execution but an almost inevitable consequence of incorrect framework conditions.

This is precisely where the real risk lies. Short-term low prices can lead to long-term dependency, potentially even a monopoly. If global battery supply becomes concentrated among a few Asian providers, it’s not only cell production that comes under pressure but the entire European automotive industry. Pricing, supply reliability, and technological advancement would then be decided outside of Europe, with direct consequences for value creation, employment, and innovation capacity.

The Real Paradox

Paradoxically, this realization leads back to the starting point. Yes, Europe fundamentally needs its own battery technology and production expertise. But not under the current conditions. Not with energy prices that are internationally uncompetitive. Not with regulatory hurdles that hinder industrial scaling. And above all, not with a technology that may have already passed its peak.

Because while Europe tries to catch up with lithium-ion cell production, the first solid-state batteries are already entering mass production elsewhere. Those investing billions in classic cell technology today risk operating a heavily subsidized infrastructure for a transitional product tomorrow.

The problem is therefore not the will for technological sovereignty, but the lack of courage for strategic honesty. As long as Europe tries to reproduce an outdated model under unfavorable conditions, every new factory will be launched as a hope and end in disappointment.

Maybe it's time to not only ask whether we want to build batteries ourselves, but also what role Europe can realistically play in the next generation of batteries.

In the end, it seems as though we are not learning from our own failures but institutionalizing them. Every new project becomes a “new beginning,” every failed factory a regrettable isolated case. Yet the pattern has long been apparent.

Maybe the most honest step would be to admit that not every key technology needs to be fully produced domestically. But every key technology should be understood. As long as Europe confuses these two things, it will continue to invest and continue to run into the same wall. (mr)