China's SVolt plans up to five Europe EV battery factories

Chinese battery maker SVolt Energy Technology is set to expand its footprint in Europe to as many as five factories, with talks to supply the region's carmakers well underway.

SVolt, spun out of BMW partner Great Wall Motor, already has two locations in Germany with one facility set to start supplying Stellantis from 2025.

The company targets production capacity of at least 50 gigawatt-hours in Europe by the end of the decade, according to SVolt Europe head Kai-Uwe Wollenhaupt. That's enough to power as many as 1 million EVs.

"The battery industry in Europe is really taking off," Wollenhaupt said in an interview. "We could develop our sites even faster if we had more resources like land and skilled workers available."

SVolt is in talks with several European car manufacturers about battery cell supply agreements, with three deals expected to wrap up until the middle of the year.

Chinese companies are expected to dominate battery making in Europe.

Contemporary Amperex Technology Co. Ltd, the world's biggest cell manufacturer, this year started output at its first European plant in eastern Germany and it's adding a €7.3 billion ($8 billion) facility in Hungary with Mercedes-Benz and Volkswagen among customers.

Chinese-owned Envision AESC plans to build battery plants in Spain and France, and EVE Energy Co., BMW's second supplier for cells produced in Europe, has bought land in Hungary.

SVolt is currently building a 12-gigawatt plant in Thuringia, Germany, after postponing the start of a €2 billion ($2.2 billion) factory in Saarland until 2027 following local protests. The company remains committed to the plans in Saarland, Wollenhaupt said.

SVolt's strategy targets smaller production sites that are less of a drain on local resources.

"We are not fans of huge factories," he said, with areas offering enough industrial land often lacking skilled workers. "In addition, the water usage becomes significant, which can create a public backlash."