Modernization of battery factories on the rise

More and more large factories for battery production have aged and need to be modernized. These so-called 'brownfield' investments also offer new business opportunities for European machinery and plant engineering on a significant scale. As the new study 'Battery Manufacturing 2030+: From Hype to Hard Truths' by VDMA and Porsche Consulting shows, the global battery equipment market volume will reach a cumulative 250 to 280 billion euros by 2035. "Particularly attractive is the modernization of existing plants, which will account for around 135 billion euros of these total investments. Here, European companies can play to their strengths: precision engineering, digital integration, and regulatory expertise," says Sarah Michaelis, head of the VDMA battery production department. In February 2024, an initial VDMA study highlighted the strategic importance of European mechanical engineering for battery production. The new study builds on this and shows: after the phase of exaggerated expectations, reality now follows - with viable projects and good opportunities for specialized providers.

While Asian factory equipment suppliers focus on mass production, European machinery manufacturers act as a specialized ecosystem. Alone, 65 VDMA members are active in electrode manufacturing. This specialization enables modular, interoperable systems - and thus greater flexibility for customers," explains Hartmut Rauen, deputy managing director of VDMA. 

Realistic plans replace hype 

The new study also documents that a more realistic analysis is now following the hype in battery production and some canceled large projects, even in the European gigafactory industry. While 1.6 terawatt-hours of production capacity for 2030 in Europe were announced at the end of 2023, by 2025 it is only 1.1 terawatt-hours. This consolidation is taking place in a market environment characterized by Asian dominance: China controls 90 percent of global cell production. Europe is now responding with support programs, tax incentives, and raw material diplomacy. Fifty percent of the announced European production capacities are to come from EU players - thus creating a perspective for European solution providers. 

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Europe's strength: specialization and integration

The study also shows that cell manufacturers are already looking for partners to modernize their facilities. They need not only hardware but also functioning production systems. "Cell manufacturers worldwide recognize that specialized expertise in process optimization is crucial - especially in the critical phase between commissioning and profitable production," emphasizes Michaelis. "European mechanical engineering companies bring exactly this: deep process know-how, seamless integration across all 16 production steps, and the ability to implement highly complex requirements promptly. Many European companies in cell assembly have expertise in several manufacturing steps - a clear advantage over standardized single solutions," adds Matthias Möhrke, expert for battery mechanical engineering at Porsche Consulting. 

Politics must do their part 

Politics must now act strategically to secure Europe's battery value chain geopolitically and strengthen it technologically. “This includes establishing effective risk monitoring, efficiently designing industrial support instruments with a clear focus on European value creation, reducing dependencies, and increasing investments in research and international partnerships. At the same time, the EU must achieve technological sovereignty through standardization and strategic scaling. Only with a clear, EU-wide orientation and determined implementation can Europe compete globally and successfully shape the transformation,” summarizes Hartmut Rauen.

Source: VDMA