The EU must increase its support for electric vehicle battery manufacturers as the bloc’s capabilities trail behind those of other global powers, Benoit Lemaignan, CEO of Verkor, told Euronews.
“We are not protected against unfair competition coming from outside the bloc,” he said. “If you want to sell batteries in Europe, you should localise. If you don’t, you should have a mechanism like a border tax to create a level playing field,” he added.
Founded in 2020 and now counting around 1000 employees, Verkor is focused on EV battery cell manufacturing and module assembly.
Late last year, the firm secured over €2 billion to finance a gigafactory in Dunkirk, with funds provided by the French state, the European Investment Bank, Renault, and Macquarie — among others.
The Grenoble-headquartered firm is seeking to prise market share away from competitors, notably seeking to boost homegrown capacity.
Foreign firms dominate the European market
According to the International Energy Agency (IEA), South Korean firms contribute most heavily to Europe’s EV battery manufacturing capacity, with companies like LG Energy Solution, Samsung SDI, and SK On remaining major players.
IEA data shows that Korea-headquartered companies make up 74% of Europe’s capacity. That’s compared to around 14% for domestically-headquartered firms.
Chinese EV makers, meanwhile, represent 12% of capacity, with CATL standing out as an industry giant.
While these figures count capacity located in Europe, even if it includes non-European-headquartered firms, over 20% of the region’s EV battery demand is also met by imported products.
Lemaignan said this should be an incentive for Europe to double down on efforts to compete with foreign suppliers.
“There was a lot of hype in 2021 and 2022 and people probably forgot to realise that it takes time to create an industry,” Lemaignan explained. “We forgot that the Koreans started 30 years ago and the Chinese started 15 years ago…we are in the moment where we need to keep the engagement.”
Ensuring fair trading practices
When it comes to overseas firms making products outside of Europe and selling into the market, Lemaignan argued that these competitors are not subject to the same environmental and labour standards, giving them an unfair advantage.
On the other hand, when asked about firms with European plants that are headquartered outside the region, he said: “If you are subsidised by a foreign country, for example the US, and you want to be acting in the European market, you need to respect rules and disclose subsidies so as to not tweak the market.”
One of the EU’s major instruments against unfair competition is the Foreign Subsidies Regulation (FSR). This legal mechanism means the Commission can investigate firms operating in the bloc that have received financial contributions from non-EU countries.
Learning from Northvolt’s failures
Earlier this year, battery maker Northvolt filed for bankruptcy in Sweden, dealing a blow to Europe’s battery manufacturing ambitions.
The Swedish firm had managed to secure $15bn from governments and investors before its downfall, although it found itself hobbled by high capital costs, supply chain disruptions, and shifts in market demand.
“Northvolt was sort of the poster child in this new green tech industry so it raises a lot of questions,” said Lemaignan. “We are trying to learn from that…Keep the focus on one product, one customer, one factory, before expanding.”
Lemaignan said that Verkor may look to expand in France, or perhaps also in Europe or the US, but he noted that this wouldn’t happen in the near future.
He called for governments to stay firm in their ambitions to phase out combustion engines and support EV battery companies, despite the challenging economic environment.
“It's not because some have struggled,… like Northvolt, that it's the end of the game. Europe needs to keep pushing,” he said.
