CEE Region Poised to Take Advantage of EV Battery Boom
By the EMIS Insights Editorial Team
As Europe is decarbonising its economy, countries across the continent are stepping up efforts to rebuild their fossil-based systems and attract clean energy investments to grab a bigger share of electric vehicle (EV) market, set to nearly triple in value by the end of this decade. Investments in setting up battery production sites are crucial in securing a substantial presence in the EV supply chain as batteries typically account for 30% to 40% of the EVs value. Two European countries seem to be winning the race so far and unlike what many would think they are not based in the western parts of the continent but at the centre. Poland and Hungary emerged as the largest battery producers in Europe in 2023 with the two countries being responsible for some two-thirds of the continent’s total output, as highlighted in the Global EV Outlook 2024 report of the International Energy Agency (IEA).
EV battery production in Europe reached 110 GWh in 2023, the IEA said. Poland was the biggest producer accounting for about 60% of all EV batteries produced on the continent, followed by Hungary with a share of nearly 30%. In terms of manufacturing capacity, Europe ranked second after China with 166 GWh in 2023. Europe’s installed battery manufacturing capacity increased by nearly 25% y/y in 2023.
Poland is currently home to Europe’s biggest car battery factory, operated by South Korea’s LG Energy Solution (the battery business unit of LG Chem), and the largest factory for energy storage systems, run by Swedish battery manufacturer Northvolt. Poland has also already established itself as a major exporter of lithium-ion batteries.
Hungary is abuzz with building activity. In the city of Debrecen alone, the country has managed to attract more than EUR 10bn in EV investments. China’s CATL, Chinese battery cell manufacturer EVE Energy, and South Korea’s EcoPro BM are all setting up production facilities in the city. At present one of the major EV battery plant operators in Hungary is South Korean SK Innovations. The company opened its first EV battery plant in the country in 2019 and is in the process of launching a third factory in the country. Another key investment is being made by South Korea’s Samsung SDI which is spending some EUR 1bn to expand its existing battery plant in the Danube city of God. China’s lithium-ion battery manufacturing company Sunwoda Electronics announced plans to open its first European plant in Nyiregyhaza, northeast Hungary.
Other CEE countries are also stepping up pace to develop their EV battery production base. Currently Slovakia is home to one battery plant being operated by local start-up InoBat. Additionally, InoBat has teamed up with Chinese battery manufacturer Gotion High-Tech to build an EV battery factory in Surany, southern Slovakia.
InoBat is also going forward with plans to set up a battery plant in Serbia. In September 2023, the company said it signed a memorandum of understanding with Serbia’s finance ministry to set up an EV battery manufacturing and recycling facility in Cuprija, a city in the central part of the country. Serbia’s first battery plant was opened in April 2023 by local battery storage startup ElevenEs. The plant, located in Subotica, manufactures lithium iron phosphate (LFP) battery cells and its annual capacity is expected to reach 500 MWh by the end of 2024, according to a report by Energy Storage news portal. ElevenEs also plans the launch of an 8 GWh facility in 2026, whose capacity is to be later raised to 16 GWh.
Czechia’s first EV battery plant was opened in 2020 in the eastern town of Horni Sucha. The plant, owned by Czech Magna Energy Storage (MES), had an initial capacity of 20 MWh. MES is currently in the process of expanding the plant’s capacity to 15 GWh. In March 2024, the Czech government announced plans for the construction of a EUR 7.9bn EV battery factory in the northeastern region of Karvina.
The global EV battery market has taken off and is on its way to grow into a massive industry within the next decade. It is poised to grow by an average of more than 20% a year until 2030, reaching a value of at least USD 360bn, according to estimates by consultancy McKinsey & Company. Policy makers in the CEE should take the necessary steps to ensure the region will reap the benefits of the battery-market opportunity. Putting in place fast-track procedures to provide financing, state aid and subsidies and ensuring collaboration with players alongside the EV battery supply chain are just several of the steps to take into account.