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Chinese Battery Maker Cancels $2.7 Billion EV Factory Plans

Story by Kathrine Frich

2hrs ago

Photo: Shutterstock© Photo: Shutterstock

 

The Chinese battery manufacturer SVOLT has announced it will shut down its European operations by January, canceling plans for two major factories in Germany.

Focus on Providing Technical Services

Originally spun off from Great Wall Motors, SVOLT had committed around $2.7 billion to develop an electric vehicle (EV) battery production site in Saarland and a cell manufacturing plant in Brandenburg.

The ambitious project was meant to support Europe’s burgeoning EV market, with a production goal of 24 GWh of battery packs annually, according to Boosted.

However, SVOLT has cited declining EV sales in Europe and rising trade barriers between the EU and China as key reasons for abandoning the project.

The company will instead focus on providing technical services, logistics support, and maintenance in Europe, marking a shift from large-scale production to a more limited operational role.

First Overseas Cell Plant

The Saarland facility was originally announced in 2020, with plans for mid-2024 production start-up, which has since faced multiple delays.

The Brandenburg cell factory, unveiled in 2022, was set to become SVOLT’s first overseas cell plant with operations projected to begin in 2025.

The company’s retreat follows other setbacks, including its abandoned bid to go public on the Shanghai Stock Exchange in late 2022.

Despite being China’s eighth-largest battery producer with a market share of 2.36%, SVOLT has struggled both domestically and internationally to establish a foothold.

In Europe, its primary client has been Citroën, though sources suggest it may have supplied BMW as well. Industry analysts note that other battery manufacturers are also struggling to break into the European market.

For instance, in September, Volvo and Northvolt’s joint venture requested $1.1 billion from the Swedish government to complete a new battery factory in Gothenburg after BMW withdrew a major contract.