Why giga factories in Europe are bridging the gap between its past and its autonomous EV future

Lars Carlstrom, CEO and Founder, Italvolt

Growing optimism for green

Following the climate change summit and Joe Biden’s recent infrastructure plan in the US, there is a growing sense of optimism for green initiatives. By the end of the year, Tesla will aim to finish building its fourth giga factory in North America, and in Europe - the regional home to automotive powerhouses like Audi, Volkswagen and Volvo - similar progress is being made after a slow start.

Over the next few years, lithium-ion batteries and the opportunity to create higher energy independence through technological development will become a focal point in Europe. Although the transition towards giga factories from combustion engines is still in its infancy, much of its popularity in the region has been supported by the demand for electric vehicles. In the European market alone, the global battery market share is expected to rise 14 fold by 2023making it one of the leading upcoming regions for battery production.

Across both Europe and the world, we’ve seen the popularity of EVs grow. This has caused the demand for batteries to soar globally and it shows no sign of slowing down, with over half of cars in the world projected to be powered by electricity by 2040. Despite this demand providing new opportunities, there still remains uncertainty around ownership of technology and the over-reliance of offshore manufacturers in Europe.

Asia vs Europe

This doubt is leading many suppliers to Asia. The region, where cheaper parts often dominate the battery market is getting glances from the European EV market. The same market which not only hopes to develop giga factories, but also develop onshore storage solutions such as super capacitors.

Following recent developments, Europe is now on course to establishing a robust position on the global stage as the world’s second-largest lithium-ion battery cell producing region. By ensuring it doesn’t rely on offshore manufacturers, European producers are certifying the local supply chain, reducing emissions through shipping, and working towards green targets. With more autonomy over production, local manufacturers will have better control over methods being used ensuring materials used to create batteries are regulated, minimising  the number of “dirty batteries” on the market and the impact on the environment.

At the time of writing, more than 20 giga factories are being built in the region to address these issues and meet growing consumer demand with the opportunity to revitalize automotive industries. In Berlin, Tesla’s intention to build its first European factory in Brandenburg represents a project in a nation synonymous with pristine car manufacturing. Although the region itself is small, the 4.4 billion euros expected to be invested in the project has drawn comparisons to Wolfsburg - the German city renowned for hosting Volkswagen AG's headquarters in the 1930s.

A new era of battery manufacturing

Similarly in the UK, plans to build the UK’s first giga factory in the North-East - known for being an industrial powerhouse in the 20th century - continues this tradition. The iconic power station located in the site is being repurposed into a giga factory ready to create small-to-large format cells as the UK intends to ban gas-powered cars by the year 2030.

Although both sites differ in location, each represents a new era of battery manufacturing, extending the automotive legacy and support the continent’s transition to renewable energy. Driven by rich talent and cost in localized regions, both are clearly developing a new technological ecosystem built on innovators from the past to propel them into the future.

As a springboard to further investment, the development of high-value localized areas in the supply chain is proving to be a perfect framework to develop these onshore ecosystems. For the EU to realize its target of 30 million electric cars by 2030 it will need a reliable backdrop and we can expect giga factories to look for a supply chain closer to home.

Post Pandemic Economic Recovery

The enormous predicted demand for batteries offers significant opportunity for neglected and run down industrial sites across the world to be reborn, bringing much needed employment and prosperity to depressed regions.  For example, the Italvolt vision is to revitalise the now neglected Olivetti commune of Ivrea, Italy where in the 1970s and 1980s they were the biggest manufacturer for office machines in Europe.  This development has the potential to reverse many years of social decline, building on a proud local manufacturing heritage alongside bringing new skills, technology, and transformational opportunity to young people in the region.

It’s not just manufacturing that stands to benefit from this development.  Battery technology is an emerging science and close collaboration with premier regional academic institutions will drive research funding and technological breakthrough.

If the building and delivery of this technology is done well, it can deliver a new paradigm of manufacturing that supports green industrialisation, social development and an accelerated route to recovery.