EU EV Transition Faces Energy Cost and Trade Policy Pressure

EU energy

EU EV transition plans are facing growing pressure from high energy costs, tougher global competition and a regulatory model that industry leaders say may be weakening Europe’s automotive position. Speakers at the FT Future of the Car Summit warned that Europe must rethink how it competes with China and other industrial economies.

EU EV transition policy has relied heavily on regulation, including the planned 2035 phase-out of new internal combustion engine car sales. But carmakers and suppliers argue that regulation alone cannot deliver a competitive electric vehicle industry if energy prices, subsidies and supply-chain costs remain unfavourable.

EU EV transition challenges are becoming more visible as Chinese automakers gain share in Europe, southeast Asia and Latin America. Chinese producers have built cost-competitive EV platforms through subsidies, domestic competition, supply-chain control and fast industrial scaling.

The debate matters for metals because slower or more expensive electrification can reshape demand for lithium, nickel, cobalt, manganese, copper, aluminium and rare earth magnets. Automotive materials demand will still grow, but the path may become less direct and more exposed to policy choices.

China’s EV Scale Forces Europe to Rethink Trade Strategy

European automotive suppliers are calling for a more realistic approach to global competition. The industry is facing rivals that operate under different labour, subsidy and industrial policy conditions.

China has become one of the world’s strongest EV exporters. It accounted for around 40% of global EV exports in 2024, while leading Chinese brands have expanded aggressively with lower-cost, technology-rich vehicles.

This creates a competitive problem for European carmakers. Europe has focused on setting strict emissions targets, while China has focused on making EVs cheaper, scalable and export-ready.

Several industry executives now argue that collaboration may become unavoidable. Western manufacturers may need to partner with Chinese or other international competitors that already have a technological lead in EV platforms, batteries, software and power electronics.

This could change European supply chains. Rather than developing every technology internally, carmakers may increasingly combine European assembly and branding with externally sourced EV systems.

That strategy could support faster electrification, but it also creates dependence on imported components, battery materials and processed inputs. It may help automakers compete on cost, but it does not solve Europe’s strategic materials vulnerability.

Energy Costs Could Slow Consumer Adoption and Metals Demand

High charging and energy costs are another major barrier to Europe’s EV push. If consumers face much higher charging costs than drivers in China or other regions, the economic case for EV adoption weakens.

This is critical because EV demand is highly sensitive to total ownership cost. Batteries may become cheaper, but charging costs, highway tariffs and energy price volatility can still shape consumer decisions.

For battery metals, this matters directly. Slower EV adoption would reduce the speed of demand growth for lithium, nickel, cobalt and manganese, especially in full battery electric vehicles with large battery packs.

Copper and aluminium remain better positioned across multiple automotive pathways. EVs require copper for wiring, motors, charging systems and power electronics, while aluminium supports lightweighting, battery enclosures and structural components.

However, Europe’s automotive metals demand will increasingly depend on which technology mix wins. Full BEVs support larger battery metals demand, while hybrids and lower-cost EV platforms could shift consumption toward smaller batteries, more electronics and continued use of conventional automotive materials.

The policy challenge is therefore industrial as much as environmental. Europe must reduce emissions while keeping manufacturing competitive, securing raw materials and lowering energy costs for consumers.

If Europe cannot align regulation, energy prices and trade strategy, its EV transition could become a market for imported vehicles rather than a platform for domestic industrial growth.

The Metalnomist Commentary

Europe’s EV problem is not only about regulation or consumer demand. It is about whether the region can build a cost-competitive industrial system around energy, materials, technology and trade before Chinese EV platforms define the market.

EU 2035 combustion engine phase-out target faces united EV industry push

EV

The EU 2035 combustion engine phase-out target is now defended by Europe’s leading EV manufacturers. Over 150 e-mobility firms urge Brussels to stand firm and protect the zero-emission deadline. Therefore the EU 2035 combustion engine phase-out target has become a symbol of industrial credibility and climate ambition.

Industry leaders argue that policy stability underpins Europe’s EV investment, jobs and charging infrastructure expansion. They highlight hundreds of billions of euros already committed across the electric vehicle value chain. As a result, they warn that political backtracking would undermine investor confidence and weaken Europe’s green industrial strategy.

Investment, jobs and the EU 2035 combustion engine phase-out target

The EU 2035 combustion engine phase-out target gives manufacturers a clear roadmap for capital deployment. Signatories point to over 150,000 new jobs created in gigafactories, retooled car plants and charging networks. Meanwhile, they stress that skills, grid resilience and supply chains already adapt to this long-term regulatory signal.

These commitments stretch from battery gigafactories in France and Germany to upgraded plants in Slovakia and Belgium. Therefore any delay to the EU 2035 combustion engine phase-out target would freeze project pipelines and defer hiring plans. The letter argues that such hesitation would reward more aggressive global competitors, particularly Chinese EV and battery makers.

Policy flexibility, global competition and EV demand momentum

The European Commission has already proposed short term flexibility on CO2 targets between 2025 and 2027. However, climate officials insist that the 2035 zero-emission goal for new cars and vans remains intact. This combination seeks to ease the transition while preserving long term certainty for investors and suppliers.

Market data shows that electric mobility continues to expand despite policy debate. Battery electric vehicle registrations in Europe rose by 34pc year on year in early 2025. As a result, industry leaders argue that weakening the trajectory now would waste hard won demand momentum.

The letter further warns that relaxing the deadline would “permanently hand the advantage” to global rivals. Europe’s EV champions see the 2035 target as a competitive anchor against heavily supported Chinese manufacturers. Therefore, they urge Brussels to pair regulatory certainty with bolder support for localized batteries, components and charging infrastructure.

The Metalnomist Commentary

The industry’s defence of the EU 2035 combustion engine phase-out target highlights how deeply capital is now locked into electrification. For metals, batteries and charging players, regulatory wobble is a larger risk than short term demand volatility. If the EU holds course while sharpening implementation tools, Europe can still shape the global EV race rather than react to it.

Neo Estonia rare earth magnet plant anchors Europe’s mine-to-magnet strategy

Neo

Neo Estonia rare earth magnet plant is emerging as a key pillar in Europe’s drive to localise magnet supply. Neo Performance Materials has officially opened the Neo Estonia rare earth magnet plant in Narva, with phase 1 capacity of 2,000 t/yr. The Neo Estonia rare earth magnet plant is designed to scale up to 5,000 t/yr, directly targeting fast-growing EV and industrial demand.

Neo Estonia rare earth magnet plant secures EV-grade offtake and EU support

The new plant has already shipped sintered magnet samples that meet EV traction motor grade standards. Neo produced around 18,000 assembled magnet pieces during initial runs, demonstrating commercial readiness for Europe’s automotive supply chain. As a result, a top European traction motor supplier has committed to buy 35pc of phase 1 output.

The Neo Estonia rare earth magnet plant also benefits from early support under the EU’s Just Transition fund. This political backing signals Brussels’ intent to build strategic magnet capacity closer to European automakers. Meanwhile, the phased design allows Neo to ramp from 2,000 t/yr to 5,000 t/yr as demand for permanent magnets in EVs, wind turbines and industrial motors accelerates.

Neo is building more than a stand-alone factory in Narva. The company already operates a 3,000 t/yr light rare earth separation plant at Silmet, west of Narva. Therefore, the Estonia hub brings Europe closer to an integrated mine-to-magnet route, reducing over-reliance on Chinese rare earth processing and magnet supply.

Bosch deal accelerates Neo’s mine-to-magnet roadmap beyond Estonia

Neo’s newly announced multi-year contract with Bosch significantly strengthens visibility for future magnet volumes. Under the agreement, Neo will reserve “significant annual magnet production capacity” for the German manufacturer. This commitment supports long-term planning and underpins the business case for expanding magnet capacity beyond Estonia.

At the same time, the Bosch agreement hastens the roadmap for Neo’s next magnet plants in Europe or North America. In addition, the deal positions Neo as a strategic partner for Tier 1 auto suppliers seeking secure rare earth magnet sourcing. For OEMs facing tight margins on EV platforms, diversified magnet supply with transparent ESG credentials is becoming a competitive advantage.

Neo’s strategy of combining separation capacity at Silmet with downstream magnet production in Narva aligns with broader mine-to-magnet ambitions in the Atlantic region. While raw material security still depends on upstream feedstock, Europe now gains an important building block in a more resilient rare earth supply chain.

The Metalnomist Commentary

Europe’s long-discussed mine-to-magnet vision is finally moving from PowerPoint to production lines in places like Narva. Neo’s Estonia complex shows how modest-scale, strategically placed magnet plants can de-risk supply for EV and industrial customers. The real test will be whether upstream feedstock, policy support and OEM offtakes scale fast enough to match China’s entrenched dominance.

Stellantis Leapmotor Spain BEV Production Plan Signals Localised Chinese EV Strategy

Stellantis

Stellantis Leapmotor Spain BEV production plans could mark a new phase in Europe’s electric vehicle supply chain, as western automakers look to combine local assembly with lower-cost Chinese components. Stellantis and Leapmotor are considering new battery electric vehicle lines at Zaragoza and Villaverde in Spain through their Leapmotor International joint venture.

Stellantis Leapmotor Spain BEV production would move the partnership beyond vehicle imports and toward European manufacturing. That shift matters because local content rules, tariff risk and regional supply security are becoming more important in the EV market.

Stellantis Leapmotor Spain BEV production could also help the companies respond to weaker European affordability conditions. Chinese component sourcing can lower cost, while Spanish assembly may improve regulatory and commercial positioning inside Europe.

The companies have not disclosed production targets, utilisation rates or investment figures. This leaves the scale of the plan uncertain, but the strategic direction is clear.

Spain Could Become a European Platform for Leapmotor Models

Zaragoza could gain a new all-electric SUV line as early as this year. The plant has long been associated with Opel production and could become a base for new BEV output under the joint venture.

Villaverde in Madrid may also become more important to Leapmotor International. The plant faces a production gap after Citroen C4 output ends and may shift entirely to Leapmotor models by 2029.

That potential transition would give Stellantis a way to protect industrial activity at existing Spanish plants while adding lower-cost BEV models to its European portfolio.

The plan reflects a broader industry pattern. European automakers are trying to defend market share against Chinese EV competition while also using Chinese platforms, components and cost structures to improve competitiveness.

Stellantis bought a 21% stake in Leapmotor in 2023 and created a 51-49 joint venture to sell and manufacture Leapmotor vehicles outside China. Spain could now become one of the key production bases for that strategy.

For Spain, the opportunity is industrial. More BEV assembly could support jobs, supplier activity and demand for local logistics, batteries, wiring, aluminium components and electronics integration.

Local Assembly Meets Cost Pressure and Supply-Chain Rules

The move from imports to local production is strategically important. European BEV manufacturing is increasingly shaped by tariffs, local content rules, battery sourcing requirements and political pressure to keep vehicle production inside the region.

Leapmotor brings cost-competitive EV engineering and components. Stellantis brings European plants, distribution, regulatory experience and manufacturing scale.

This combination could help address one of Europe’s biggest EV problems: producing affordable electric vehicles while maintaining regional industrial capacity.

However, the lack of disclosed volumes makes the market impact difficult to judge. Without production targets, it is unclear whether the Spain plans will materially change Stellantis’ European BEV output.

Stellantis needs stronger BEV momentum. Its BEV sales accounted for around 13% of output in the first half of last year, behind Volkswagen and BMW, and the company later reported a major write-down after cutting prices.

Leapmotor is growing much faster. Its EV sales, including plug-in hybrids, more than doubled last year to 596,000 units. That growth gives Stellantis access to a Chinese partner with clear scale momentum.

The industrial implication extends into materials. More European BEV production increases demand for aluminium body and structural parts, copper wiring, electrical steel, battery materials, power electronics and lightweight components.

If the model works, Stellantis and Leapmotor could create a template for Chinese-designed, Europe-built EVs. That would reshape competition not only in vehicles, but also in the upstream materials and component chains that support regional BEV manufacturing.

The Metalnomist Commentary

Stellantis and Leapmotor are not only discussing new Spanish EV lines; they are testing a hybrid supply-chain model for Europe. Local assembly with Chinese components may become a practical route for automakers caught between cost pressure, tariff risk and the need to keep European factories active.

China’s Gotion Predicts LFP Batteries Will Dominate Global EV Market

Gotion High-Tech

Chinese battery producer Gotion High-Tech forecasts that lithium-iron-phosphate (LFP) and lithium-manganese-iron-phosphate (LMFP) batteries will claim up to 70% of the global electric vehicle (EV) battery market in the next 2-5 years. Speaking at the ASEAN Battery Technology Conference in Singapore, Gotion’s Asia-Pacific president Cheng Qian highlighted the rising prominence of LFP chemistry, particularly in affordable EVs and energy storage systems.

The Rise of LFP Batteries

Qian projected that LFP batteries will dominate not only the global EV market but also the entire energy storage system (ESS) sector, exceeding even the IEA’s 80% forecast. He attributed this growth to advancements in LFP battery range and faster charging times, catering to the needs of everyday EV consumers. In contrast, nickel-cobalt-manganese (NCM) batteries are expected to remain essential only for high-performance and long-range EVs.

This shift has placed pressure on the nickel market, as manufacturers pivot to cost-efficient LFP solutions. South Korean giants such as Samsung SDI and SK On are preparing to mass-produce LFP batteries by 2026. Meanwhile, LG Energy Solution (LGES) has committed to supplying 39GWh of LFP batteries to Renault's EV division Ampere, underscoring Europe’s growing focus on LFP technology.

Two-Wheeler EV Transition in Asia-Pacific

The two-wheeler EV market, particularly in Asia-Pacific, is also expected to transition from NCM to LFP batteries. India, Indonesia, and the Philippines are leading this shift due to cost concerns and government initiatives.

• India: Achieved record EV sales in FY2023-24, with two-wheeler EV sales rising 30% year-on-year to 944,126 units.
• Indonesia: Aims for 2 million electric motorcycles by 2025, supported by a $458 million subsidy program launched in March 2023.
• Philippines: Targets a 50% electric motorcycle and tricycle share by 2030, with cost efficiency driving adoption.

A Global Shift in Battery Technology

With its affordability and sustainability, LFP battery technology is reshaping the global EV landscape, especially in cost-sensitive markets. Companies like Gotion, LGES, and Samsung SDI are at the forefront of this transformation, signaling a shift towards accessible and efficient energy solutions.

Envision AESC Launches Battery Plant in France to Boost Global EV Supply

Envision AESC

Strategic Expansion into Europe

Chinese battery manufacturer Envision AESC has inaugurated a 10GWh per year battery plant in Douai, northern France. The facility’s initial phase will produce enough cells to power 200,000 electric vehicles annually, supporting Europe’s growing demand for clean transportation. While the company has not disclosed timelines for subsequent phases, the project represents a significant step in its global manufacturing strategy.

Envision AESC’s goal is to achieve a total global battery capacity of 400GWh per year by 2026, with operations spanning 13 battery manufacturing bases across China, Japan, the US, the UK, France, and Spain. This broad geographic footprint is designed to meet the surging needs of the rapidly developing EV sector and strengthen resilience against supply disruptions.

Scaling Capacity Amid Geopolitical Shifts

The company is simultaneously doubling its production in Cangzhou, China, to 20GWh per year by 2026 and constructing a gigafactory for lithium iron phosphate batteries in Navalmoral de la Mata, Spain, scheduled to start output in 2026. These moves align with a wider trend among Chinese battery firms expanding overseas in response to geopolitical pressures, including higher US import tariffs and the EU’s Critical Raw Materials Act.

Envision AESC is a joint venture between Chinese-owned Envision and Japanese-owned AESC, itself a collaboration between automaker Nissan and component maker Tokin. By strategically positioning manufacturing assets within key markets, the company aims to enhance customer proximity, reduce logistics risks, and align with local regulatory requirements.

The Metalnomist Commentary

Envision AESC’s French facility marks another decisive step in the localization of battery supply for Europe’s EV market. By combining European production with a global expansion strategy, the company is hedging against trade tensions while capturing market share in high-growth regions. The challenge ahead will be scaling production efficiently while adapting to evolving environmental and trade policies in multiple jurisdictions.

BMW Delays Mini BEV Production in UK Amid Industry Uncertainty

BMW Factory

Shift in EV Policy and Market Dynamics Impacts Oxford Plant Timeline

BMW Group, owner of the Mini brand, has postponed the launch of Mini battery electric vehicle (BEV) production at its Oxford facility in the UK. The company attributes this decision to ongoing uncertainty in the automotive industry, particularly regarding the UK's evolving electric vehicle (EV) policies and volatile demand.

Grant Rejected as Policy Shifts Cloud Investment Decisions

BMW has chosen not to accept a planned grant from the UK government for the Oxford plant. However, both parties confirm they will continue discussions about future projects. The UK government recently began consulting on plans to phase out new petrol and diesel car sales by 2030. Earlier changes to these deadlines have introduced doubt among manufacturers, prompting a more cautious approach to new EV investments.

Europe’s EV Market Faces Uneven Demand and Intense Competition

While UK EV sales surged 41% year-on-year last month, demand fell by 27% in Germany last year. Moreover, even where demand for electric cars is rising, buyers increasingly prefer lower-cost Chinese EVs. This trend puts additional pressure on established European automakers like BMW, as they struggle to compete with more affordable imported alternatives.

CNGR to Withdraw from pCAM Plant in Finland

CNGR Advanced Materials

Strategic Exit Reflects Shifting Battery Market Conditions

Chinese battery materials producer CNGR Advanced Materials will exit its planned pCAM plant in Finland, citing tough market conditions. The plant, located in Hamina, was expected to produce 60,000 metric tonnes per year of precursor cathode active materials (pCAM).

CNGR’s withdrawal was driven by slower EV adoption in the EU and regulatory uncertainties, according to CEO Dani Widjaja. The move signals CNGR’s intent to focus on core operations amid a changing global demand environment for battery materials.

As a result, the Finnish Minerals Group — a state-owned special purpose entity — will now hold full ownership of the joint venture.

Second Global Pullback Raises Supply Chain Questions

This is CNGR’s second major overseas exit in 2024, following its earlier withdrawal from a nickel JV with South Korea's Posco. Such retrenchments highlight how macroeconomic and policy shifts can reshape battery material investment strategies.

The decision could also impact Finland’s broader ambitions in the battery supply chain.

Specifically, it raises questions for the Easpring-Finnish Minerals Group CAM joint venture, as pCAM is a critical upstream input.

Meanwhile, Finland remains committed to building out its domestic battery value chain, though investor appetite may now face increased scrutiny.

EU Battery Landscape Faces Investment Headwinds

CNGR’s exit reflects broader investment hesitation in Europe’s EV materials sector, which has been slower to mature than expected. High inflation, policy delays, and competition from US incentives have complicated Europe’s path toward battery supply autonomy.

However, Finland continues to be a key node in Europe’s raw material strategy, offering abundant natural resources and strong political support. Yet securing consistent, long-term partners will be essential to maintaining momentum in battery precursor and cathode development.

The Metalnomist Commentary

CNGR’s Finland retreat is a cautionary tale for Europe’s battery ambitions. Supply chain localization must move faster than global headwinds. Without synchronized policy and demand growth, the continent risks losing strategic partners to more stable or incentivized regions.

China Challenges EU's EV Tariffs at WTO

In a significant escalation of trade tensions, China has filed a formal complaint with the World Trade Organization (WTO) over the European Union's (EU) imposition of provisional anti-subsidy duties on imports of Chinese battery electric vehicles (BEVs). Beijing argues that the EU's actions lack a solid factual and legal foundation and violate WTO rules, potentially undermining global efforts to combat climate change.

A spokesperson for China's Ministry of Commerce expressed strong dissatisfaction with the EU's decision, urging immediate rectification. "The EU's preliminary ruling is baseless and disrupts the stability of China-EU economic and trade relations, as well as the supply chain of electric vehicles," the spokesperson said.

The European Commission had imposed these additional duties on July 5th, targeting three major Chinese EV manufacturers. BYD, Geely, and SAIC faced new tariffs of 17.4%, 19.9%, and 37.6%, respectively. The duty on SAIC, China’s largest automaker, was slightly reduced from an initial 38.1%. The final determination on these duties, which could last for five years, will be made by EU member states.

SAIC, a key player in the EV market, with significant exports to the UK, France, Germany, and Spain, has formally requested a hearing on these temporary countervailing duties. The Chinese government also called for expedited consultations with the EU to reach a mutually agreeable solution.

China, which accounted for 59% of global BEV sales in the first half of the year, sees this move as detrimental not only to its economic interests but also to the broader goal of global climate cooperation. Meanwhile, Europe’s EV market growth has slowed significantly, largely due to the reduction of fiscal subsidies, slow progress in building charging infrastructure, and broader economic challenges.

Easpring Launches Lithium CAM Production in Finland to Supply European Battery Market

Finnish Battery Group

Joint Venture with Finnish Minerals Backs Strategic CAM Investment in Kotka

Beijing Easpring has initiated lithium CAM production in Finland, targeting Europe’s expanding battery manufacturing sector. The new facility in Kotka, southeast Finland, is being developed through a joint venture with Finnish Minerals Group (FMG) and its subsidiary Finnish Battery Chemicals (FBC). The project, valued at €800 million, marks a pivotal step in establishing localized cathode active material (CAM) production in the EU.

500,000t Capacity Aims to Meet Surging European Battery Demand

The facility will produce 500,000 tonnes/year of CAMs, including 200,000 tonnes of NCM and 300,000 tonnes of LFP/LMFP. The first phase targets 60,000 tonnes of NCM, aligning with growing EV demand and localized supply strategies. While the launch date remains undisclosed, Easpring emphasized its commitment to sustainability and innovation in lithium CAM production in Finland.

Strengthening Finland’s Battery Value Chain and Industrial Sovereignty

The investment strengthens Europe’s ability to produce battery-grade materials domestically, reducing reliance on imported inputs. FMG CEO Matti Hietanen highlighted the project's importance to Finland’s battery value chain, while Easpring Chair Chen Yanbin noted its role in setting global CAM standards. The company already supplies major OEMs including SK On, LGES, and Samsung SDI, and sources materials from CNGR, Albemarle, and Huayou Cobalt.

The Metalnomist Commentary

The move to localize lithium CAM production in Finland aligns with Europe’s EV supply chain autonomy goals. Easpring’s investment marks a strategic pivot toward resilient, regional battery materials manufacturing that could reshape EU-China industrial partnerships.

Umicore’s Battery Materials Sales Plunge by 30% Amid EV Market Headwinds

Umicore

Northvolt collapse and weak demand weigh on Europe’s battery supply chain

Battery Materials Division Suffers Sharp Decline

Umicore reported a 30% drop in sales from its battery materials division in 2024, totaling €386 million. The Belgian chemical company cited declining demand across Europe and global weakness in electric vehicle (EV) sales as key drivers. Chief executive Bart Sap described the year as “sobering,” pointing to stalled EV adoption and strategic setbacks. As a result, Umicore paused development at its Canadian plant and tightened capital spending.

Northvolt Bankruptcy Disrupts Strategic Supply Agreement

A major blow came from the bankruptcy of Swedish battery manufacturer Northvolt, which filed in March 2024. Northvolt had signed a long-term supply agreement with Umicore in 2021 for cathode active materials (CAMs). This deal was central to Umicore’s efforts to expand in Europe’s battery value chain. However, the fallout has delayed market ramp-up and disrupted regional supply ambitions. The company expects flat battery materials performance to continue through 2025.

Germanium Business Shows Resilience

Meanwhile, Umicore’s electro-optic division saw modest growth, led by demand for germanium-based products in aerospace and electronics. In addition, the firm benefited from recycling demand through its closed-loop germanium refining services. To strengthen feedstock security, Umicore partnered with STL, a subsidiary of Gecamines in the Democratic Republic of Congo. Shipments from the Big Hills Tailing site began in January and are expected to continue monthly, supporting Umicore’s supply diversification.

The Metalnomist Commentary

Umicore’s performance in 2024 highlights the growing vulnerability of Europe’s battery ambitions. The collapse of Northvolt is a cautionary tale, exposing weaknesses in upstream coordination. While setbacks continue in battery materials, Umicore’s pivot to strategic germanium sourcing may offer short-term stability.

 

Gotion Slovakia battery plant anchors new EU battery supply hub

Gotion Slovakia battery plant

Gotion Slovakia battery plant construction has begun, marking a major step in Europe’s race for local EV cell capacity. The Gotion Slovakia battery plant will be the country’s first gigafactory and a key node in China–EU battery supply chains. As a result, the Gotion Slovakia battery plant positions Slovakia as a new player in Europe’s electrification map.

Gotion Slovakia battery plant targets EU gigafactory scale

The first phase of the Gotion Slovakia battery plant will add 20GWh a year of lithium-ion capacity. Gotion plans pilot production in 2026, with commercial volumes starting in 2027 and feeding customers across EU markets. This timing aligns with accelerating European EV and energy storage demand, as automakers seek diversified cell suppliers.

Meanwhile, the Surany facility will be Slovakia’s first battery gigafactory, strengthening Central Europe’s role as an automotive manufacturing corridor. Products will likely support both passenger EVs and stationary storage, given Gotion’s broad lithium-ion portfolio. Therefore, OEMs and Tier-1 suppliers in the EU gain another large-scale, non-European cell source inside the single market.

Chinese battery makers accelerate overseas footprint

Gotion has rapidly expanded outside China, with projects in Morocco, Thailand, Japan and the US adding to 20 global plants. The company targets 300GWh a year of installed capacity by 2025, including 100GWh outside China, to serve regionalised EV supply chains. However, its planned Michigan cathode and anode plant was cancelled after policy disagreements with local authorities.

As a result, Europe and emerging markets now absorb more of Gotion’s outbound investment as geopolitical trade risks rise. Chinese battery makers are building overseas to diversify customers, reduce tariff exposure and align with “local-for-local” industrial policies. These projects also hedge against potential future export controls on advanced battery materials and equipment.

Export controls delayed but policy risk remains

China has postponed planned export restrictions on certain high-end lithium batteries, key equipment, cathode materials and artificial graphite. The one-year delay followed talks between Xi Jinping and Donald Trump and removes an immediate brake on Chinese firms’ overseas expansion. However, the episode underscores how quickly regulation can reshape the global battery value chain.

In the near term, Gotion and its peers gain critical time to lock in projects and qualify products with Western OEMs. Longer term, governments may still tighten controls around strategic battery technologies and materials. Therefore, assets like the Gotion Slovakia battery plant will be increasingly valued for their on-shore, policy-resilient capacity.

The Metalnomist Commentary

Gotion’s Slovakia project is another sign that gigafactory competition is shifting from pure cost to geopolitical resilience. For European automakers, Chinese-backed plants inside the EU offer cost-effective capacity but deepen strategic interdependence. The next question is whether Brussels and national governments will pair such investments with stronger upstream and recycling policies to secure the full battery value chain.

Hydro Takes Full Ownership of Battery Recycler Hydrovolt

Hydrovolt

Acquisition Strengthens Hydro's Position in the Growing EV Battery Recycling Market

Norwegian aluminum producer Hydro has announced the acquisition of the remaining shares in battery recycler Hydrovolt from Swedish battery manufacturer Northvolt. This move gives Hydro full ownership of Hydrovolt, solidifying its position in the rapidly expanding electric vehicle (EV) battery recycling market. The acquisition, valued at 78 million kroner ($6.8 million), is expected to close in the first quarter of 2025, pending court approval.

Hydrovolt, established in 2020 as a 50:50 joint venture between Hydro and Northvolt, operates one of Europe's largest EV battery recycling plants in Fredrikstad, Norway. The plant boasts a 95% recovery rate for materials used in EV batteries, including plastics, copper, aluminum, and black mass—a powder containing valuable elements such as nickel, manganese, cobalt, and lithium.

Expansion and Future Plans

Hydrovolt is also constructing a new recycling plant in Hordain, northern France, with operations slated to commence later this year. The company aims to recycle approximately 300,000 tonnes of battery packs by 2030, equivalent to roughly 500,000 EV batteries.

This acquisition comes as Northvolt faces financial challenges, having filed for Chapter 11 bankruptcy in November 2024 due to substantial debt. Hydro, which has been solely financing Hydrovolt's operations since mid-2024, now seeks a new partner to secure long-term funding for the subsidiary.

Strategic Significance

Hydro's full ownership of Hydrovolt underscores its commitment to sustainable and circular solutions within the aluminum and battery value chains. This strategic move strengthens Hydro's position in the burgeoning EV battery recycling market, contributing to a more environmentally responsible and resource-efficient industry.

Neo Estonia Magnet Production Begins with First Traction Motor Samples

Neo Performance Materials

Neo Performance Materials has shipped its first samples under its new Neo Estonia magnet production facility. The company produced 18,000 sintered magnet units at its Narva plant, meeting electric vehicle (EV) traction motor standards. These magnets are now being tested by a key European customer for performance validation.

Strategic Facility Targets EV Supply Chain Localization

The Estonia plant has an initial capacity of 2,000 t/yr, with plans to scale to 5,000 t/yr. It marks a critical step in Europe's strategy to localize its EV supply chain. Backed by Export Development Canada and the EU’s Just Transition Fund, the $75 million facility is designed to reduce reliance on Asian magnet suppliers.

Commercial Production Expected by Late 2026

Neo expects to receive production part approval in early 2026. Full commercial production is set to begin later that year. A leading European EV traction motor manufacturer has already secured 35% of the plant’s first-phase output, confirming strong early demand for Neo Estonia magnet production.

The Metalnomist Commentary

Neo’s new Estonia facility demonstrates how permanent magnet supply chains are shifting westward. With EV demand growing, Neo Estonia magnet production could be a cornerstone of European critical materials independence.

ICL and Dynanonic Partner to Boost LFP Cathode Production in Europe

BMW

Israeli specialty minerals company ICL and Chinese battery cathode producer Shenzhen Dynanonic have formed a joint venture to manufacture lithium iron phosphate (LFP) cathode active material (CAM) in Europe. This collaboration aims to enhance the region’s battery supply chain and support the growing demand for EV and energy storage solutions.

Repurposing the Sallent Site for LFP Production

ICL has repurposed its Sallent site in Spain, previously used for potash production, to develop the new LFP cathode production facility. The joint venture represents a strategic shift towards sustainable battery materials. The companies will initially invest €285 million ($293 million), with ICL holding an 80% stake and Dynanonic the remaining 20%.

Strengthening Europe’s Battery Supply Chain

The new LFP facility will boost Europe's domestic production of battery materials, reducing reliance on Asian imports. The demand for LFP cathodes has surged due to their cost-effectiveness, safety advantages, and long cycle life compared to nickel-manganese-cobalt (NMC) alternatives. The European EV market and energy storage sectors will directly benefit from this development.

ICL and Dynanonic’s Strategic Vision

By leveraging ICL’s European presence and Dynanonic’s expertise in LFP cathode technology, the joint venture positions itself as a key player in the battery materials industry. This investment aligns with Europe’s push for battery independence and sustainable energy solutions.

Vattenfall to Invest €5 Billion in German Renewables by 2028

Vattenfall

Massive Investment in Renewable Energy

Swedish state-owned energy giant Vattenfall has unveiled ambitious plans to invest over €5 billion in Germany by 2028 as part of its commitment to the energy transition. The initiative underscores Germany's growing importance as a hub for renewable energy development.

Focus Areas: EV Infrastructure and Solar-Battery Integration

A significant portion of this investment, approximately €500 million, is earmarked for developing electric vehicle (EV) charging infrastructure across Germany. This aligns with the increasing demand for a robust EV ecosystem to support the shift towards carbon-neutral mobility.

Vattenfall also aims to expand its solar energy portfolio by building 500MW of solar parks annually. These parks will be coupled with 300MW of large-scale battery energy storage systems, ensuring grid stability and compensating for fluctuations in solar power generation.

Wind Power Expansion

The company's wind energy projects are equally impressive. Vattenfall is set to bring the Nordlicht 1 and 2 wind farms online by 2028, delivering a combined capacity of 1.6GW. Although Nordlicht 1's initial operational date was planned for 2027, it has been slightly delayed.

In its Q3 2024 financial results, Vattenfall highlighted that it had already added 1.3GW of new wind capacity over the past year, a testament to its leadership in renewable energy development.

A Step Towards Energy Transition

Vattenfall’s investment marks a pivotal step in Europe’s energy transition. By focusing on solar, wind, and EV infrastructure, the utility not only contributes to Germany's climate goals but also fortifies its position as a leader in sustainable energy solutions.

AE Elemental Unveils New EV Battery Recycling Facility in Poland

AE Elemental

AE Elemental, a joint venture between US-based Ascend Elements and Poland’s Elemental Strategic Metals, has opened its first commercial-scale EV battery recycling facility in Zawiercie, Poland, on 19 September. The facility marks a significant step in advancing sustainability within the electric vehicle industry by disassembling, discharging, and shredding used EV batteries.

Expansion Plans in Europe

The facility, which is capable of processing 12,000 metric tonnes of used lithium-ion batteries annually, or roughly 28,000 batteries, produces black mass—a key material for manufacturing new batteries. AE Elemental plans to expand its operations by adding lithium extraction capabilities in 2024, with full-scale operations expected by 2026. This development will help European companies meet new EU regulations, which require a minimum amount of recycled content in batteries by 2030.

Additionally, AE Elemental has plans to construct another, larger facility in central Germany, with the capability to recycle 25,000 tonnes of EV batteries annually, or around 58,000 batteries. This expansion will further solidify AE Elemental’s role in Europe’s push towards a circular economy and sustainable energy solutions.

BEV Sales Decline in Europe Amid Infrastructure Challenges

battery electric vehicles (BEVs)

Sales of battery electric vehicles (BEVs) in Europe continued to slide in August, marking a 36% year-on-year decrease to 125,833 units, according to the European Automobile Manufacturers Association (Acea). BEVs accounted for 14.4% of the EU car market, a steep drop from the 21% share held a year earlier. This represents the fourth consecutive month of shrinking market share, following consistent growth in 2022.

Acea attributed the decline to Europe’s lack of "crucial conditions" necessary for growing its BEV market. Insufficient charging infrastructure, a less competitive manufacturing landscape, uncertain raw material supply chains, and weak consumer purchase incentives were all cited as barriers. "As a result, the zero-emission transition is highly challenging," the association stated, expressing concerns about the ability to meet the 2025 CO2 reduction targets for cars and vans. Acea signaled its readiness to discuss short-term measures to safeguard the future of Europe's industrial and automotive sectors.

Policy Divides on BEV Transition

The EU’s goal of phasing out new fossil fuel-powered cars by 2035 has sparked debate. Italian Prime Minister Giorgia Meloni has called the plan "self-destructive," while major car-producing nations like Germany and the Czech Republic have called for looser regulations. Earlier this month, Germany's coalition government endorsed a tax relief proposal aimed at boosting EV adoption, after discontinuing a subsidy program in 2022.

Despite the broader downturn in BEV sales, Swedish carmaker Volvo stood out with a 28.6% increase in overall car sales in August, selling 16,113 units. The company’s EX30 BEV model ranked as the third best-selling BEV in Europe for the first half of 2023. However, Volvo’s ties to Chinese carmaker Geely have prompted renewed scrutiny of the growing presence of Chinese EV makers in the European market.

In total, the European car market experienced a 16.5% contraction in August, driven by supply chain challenges and a weakened economic outlook. Major markets, including Germany, France, and Italy, saw significant double-digit declines, while the UK posted a modest 1.3% decrease in sales.

Germany sets four-year BEV support for 2026–29 to revive private EV demand

BEV

Germany sets four-year BEV support for 2026–29 to restart private buying after a volatile incentives cycle. Germany sets four-year BEV support for 2026–29 with income-based eligibility and a fixed budget ceiling. Therefore, the plan targets affordability and stability rather than blanket market stimulation.

Germany sets four-year BEV support for 2026–29 after incentives ended in 2023 and BEV sales fell 27% in 2024. That decline let the UK overtake Germany as Europe’s largest BEV market. Meanwhile, Berlin now aims to smooth demand with a multi-year framework instead of short bursts.

Households under €80,000 taxable income can claim €3,000 for BEVs and €1,500 for plug-ins. The threshold rises to €90,000 with two children, with €500 per child and extra top-ups for lower earners. As a result, the subsidy design pushes support toward families and mid-income buyers.

Income caps and hold rules reshape demand and resale behavior

A 36-month holding period applies across the scheme to reduce quick resale of subsidised cars. Applications open in May, but registrations must occur after 1 January 2026. Therefore, the policy sets a clear start line for OEM planning and dealer pipelines.

The €3bn budget could support about 800,000 vehicles, which may sit below potential demand if sales rebound. If uptake accelerates, support per vehicle could effectively tighten through allocation pressure. However, the scheme may still lift baseline demand by lowering upfront cost and improving buyer confidence.

Plug-in limits and budget pressure could shift the mix

Plug-ins qualify only until mid-2027 and only with an 80km electric range or emissions under 60g CO2/km. Berlin may also tighten plug-in funding later using real-world CO2 performance data. Meanwhile, that approach addresses the risk that incentives pull buyers toward plug-ins rather than full BEVs.

The timeline also aligns with Germany’s extension of the EV vehicle-tax break to 2035, which supported a late-year sales rebound. December registrations reached 54,774, up 63% year on year. As a result, the new subsidy could amplify momentum if supply and pricing cooperate.

The Metalnomist Commentary

This policy looks like a demand-stabiliser with guardrails, not an aggressive volume push. However, the income caps will steer buyers toward lower-priced models. That dynamic could widen the lane for cost-competitive entrants, including Chinese brands.

Germany's Olaf Scholz Urges Unified EU Support for EVs and Steelmakers

Scholz

German Chancellor Olaf Scholz has called on the European Union (EU) to implement comprehensive measures to boost electric vehicle (EV) manufacturing and protect its steel industry from overcapacity and dumping. Speaking at an EU leaders' meeting, Scholz emphasized the importance of collaboration within the bloc and avoiding conflicts with major trading partners like China.

Scholz specifically urged Brussels to seek a "good conclusion" with Beijing regarding countervailing duties on Chinese battery electric vehicle (BEV) imports. EU negotiators are exploring a price commitment mechanism to address concerns about cheap imports, but Scholz opposed punitive duties, arguing, "It makes no sense having a conflict about this."

EV Manufacturing and Emissions Targets

To support European carmakers, Scholz proposed that the EU reconsider its stringent greenhouse gas (GHG) emissions targets for light passenger vehicles. The upcoming target of 93.6g CO2/km for 2025-2029, a 15% reduction from 2021 levels, has faced criticism for its ambitious timelines. Scholz suggested easing penalties for automakers unable to meet these requirements by 2025, stating, "It makes no sense to burden [car manufacturers] with additional penalties for not achieving results."

The targets will tighten further, reaching 49.5g CO2/km from 2030-2034 and zero emissions by 2035, effectively banning internal combustion engine vehicles. Scholz called for a balanced approach, ensuring that penalties do not hinder firms’ liquidity, especially as they ramp up investments in electro-mobility.

Additionally, Scholz proposed a "common subsidy concept" across EU member states to stimulate EV production and enhance Europe’s competitiveness in the global automotive market.

Addressing Steel Industry Challenges

Scholz also highlighted the urgent need for the EU to tackle overcapacity, dumping, and the influx of cheap steel imports that threaten European steelmakers. He advocated for a unified strategy to safeguard the bloc's industrial base, underscoring the strategic importance of the steel sector to the EU's economy and energy transition goals.