The battery industry in Europe is currently at a crucial juncture.
As the continent strives to establish itself as a significant player in the energy transition, external competition, particularly from Asia, poses significant challenges.
A determining factor is the “price dumping” practised by China, a tactic that has shaken other industrial sectors and now threatens to erode Europe’s competitive capacity in the battery market.
Gianpaolo Costantini, Senior Manager at Northvolt AB, emphasises the urgency of implementing robust political measures to prevent the continent from losing ground in a key strategic battle for its energy future.
“More than a decade ago, I witnessed something that shook our industry to its core: an aggressive price dumping strategy by China in the telecommunications sector,” he states.
This resulted in a drastic decline in prices.
European companies, unable to compete under those conditions, lost a significant portion of the market.
“Prices fell to absurdly low levels, sometimes even to zero. Those prices were unsustainable; they were designed to seize market share by force. And they succeeded,” he points out.
This scenario is now repeating itself with batteries, but with an important difference: Europe is not the leader in this market; it is lagging behind.
He warns: “Now, a decade later, here we are again, this time with batteries. And the challenge is even greater.”
While the continent already has operational factories and a supply chain in place, Asian competition is bolstered by long-term state support policies, putting European companies at a disadvantage.
The call to action
Costantini is unequivocal in his diagnosis: investment alone will not be sufficient to overcome current challenges.
While capital is essential, the true key lies in political action.
“We need urgent and decisive action. And this is where our policymakers must step in,” he asserts.
The sluggish decision-making within the European Union (EU) is seen as a hindrance in a context that requires speed and determination.
“The wheels of European politics may turn slowly, but this is not the time to hesitate,” he insists.
Europe has an advantage, he argues, in the fact that there are already operational infrastructures and factories in place.
However, this potential is at risk of being undermined if decisive action is not taken.
“We already have a supply chain in place. We are here, ready to compete. But we need policymakers to act,” emphasises the Northvolt executive.
The impact of price dumping on the industry
Price dumping is a business practice in which a company or country sells products abroad at prices lower than those in the domestic market, often with the backing of state subsidies.
In the case of the battery sector, Asian competitors, particularly China, have been accused of employing this strategy to corner the global market, weakening local companies in Europe and the United States.
Olivier Dufour, co-founder of Verkor, supports this viewpoint and offers a broader perspective.
“The reality is that 100% of the 160 million smartphones sold in Europe each year come from Asia, and 100% of them run on American software,” he points out.
And he questions: “Do we want the same situation for electric vehicles and batteries?.”
According to Dufour, the European Union has made efforts to avoid this type of dependency in the cell sector, but it faces structural limitations.
“The EU is not the United States. It is not China. It is not an independent country. It is a union of 27 member states that do not agree on what is right and do not share the same vision of liberalism,” he states.
The competition in the battery sector: Is it truly level?
Danson Michael Joseph, a battery engineering specialist, offers an interesting counterpoint.
For him, the issue does not lie in an uneven playing field but in the EU’s reluctance to utilise tools such as state funding due to liberal ideologies.
“Europe cannot budge on its ideological aversion to state support and, therefore, falls behind. It is not unfair. The playing field is level; we are simply not willing to use the lever of state funding,” he argues.
This aligns with what Ethan Meng has articulated, providing a perspective based on Chinese experience.
Meng notes that while China initially sought to support local electric vehicle companies with subsidies, this strategy ultimately failed.
“Many companies merely applied for subsidies, deceiving while not genuinely developing new technologies. The real change came when the Chinese government decided to open the gates to Tesla without restrictions,” Meng explains.
In this regard, he highlights that open competition was what propelled innovation in the sector.
The future of Europe in the battery industry
The battery industry is not only key to the transition towards electric mobility but also serves as a strategic pillar in Europe’s energy independence.
Jean-Romain Fougerat, VP of Sales at Contemporary Nebula Technology Energy Co., emphasises that since international agreements like the Kyoto Protocol, it has been clear that decarbonisation would be a global priority.
“The Chinese and Koreans got to work straight away. Europe has been focused on politics (not industry) and has swooned over the outcome of COP21,” he asserts.
The debate on how to tackle unfair competition in the battery sector intensifies as the continent seeks a balance between maintaining free trade principles and protecting its strategic industries.
“European companies are calling for help. The green energy sector is following the same destructive path,” Fougerat adds.
Competition in the battery industry has reached a critical point.
As European companies struggle to establish themselves in a global market dominated by Asia, price dumping and the lack of long-term state support are undermining their ability to compete on equal terms.
Voices from the industry, such as that of Gianpaolo Costantini, urgently call upon policymakers to implement decisive measures that protect the future of this strategic industry.
“The time to act is now. Batteries are a strategic battleground in the race for energy independence. Wake up. Protect what we have built. And for the sake of Europe’s future, get it done!” Costantini concludes.
