2025 was the year battery execution became real in Europe
Factories opened. Assumptions met reality. Outcomes started to diverge.
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Thank you for being a thoughtful reader. I hope my work continues to benefit you and your organization in 2026.
With that, the first article of the year.
Europe talked about building a battery industry for a decade. By 2025, the talk ended.
Factories opened, and lines began operating. Scrap accumulated while yields missed targets and timelines slipped.
Europe learned the actual costs of the battery race.
The shift that defined 2025
Throughout the late 2010s and early 2020s, Europe’s battery strategy remained quite abstract. Announcements of gigafactories led to policy frameworks, which then resulted in funding rounds and technology roadmaps with capacity targets measured in terawatt-hours.
The implicit bet: invest in capital and policy, and execution will follow.
2025 shattered that assumption.
Europe reached a point where learning curves had to deliver results. Before production begins, mistakes can be easily reversed. After production starts, they tend to multiply.
Battery manufacturing fails when thousands of small decisions clash at scale. Process stability is essential. Material consistency drives output. Workforce training occurs under pressure. Maintenance discipline either exists or it doesn’t. Ramp-up sequencing either works or costs money.
In 2025, Europe entered that phase. The pattern became unmistakable.
Late-stage exposure: when learning curves must pay off
Some European projects reached a point where speculation ended, and results became clear.
Northvolt was the most evident example.
By 2025, Northvolt had limited operational history, multiple installed lines, trained teams (in theory), and billions invested. The learning curve had time to improve, but it didn’t.
Yield issues continued while ramp-up expectations declined. Cash burn sped up, and external funding dried up. Northvolt filed for bankruptcy in March 2025 and stopped production in June.
Lyten later bought the assets, confirming the diagnosis. The risk of failure became real.
ACC faces a similar stage, but with a different path.
By 2025, ACC was trying to ramp up production under European cost constraints, workforce limitations, and strict qualification rules from OEM shareholders.
Production was harder than expected.
ACC hasn’t failed yet, but its current performance determines its future. It had to partner with a Chinese company to get through the ramp-up phase (valley of death).
Li-Cycle and Natron tell similar stories in different technologies and markets, but both face the same core issue. Once operations grow, narratives end, and the focus shifts to cash flow, production, and reliability.
They ended up like Northvolt.
Entry into execution risk
At the same time, Europe experienced significant developments in 2025. Factories finally opened their doors.
PowerCo launched production in Salzgitter, while Verkor began operations in Dunkirk. AESC expanded its manufacturing presence across Europe.
These events were seen as signs of progress, and they are. However, they also introduce execution risk rather than eliminate it.
PowerCo and Verkor haven’t yet succeeded or failed. They have passed the point where results depend on operational performance.
For PowerCo, the stakes are exceptionally high.
Volkswagen is trying to establish battery manufacturing as a strategic capability under European labor conditions with stringent OEM requirements. The opening of the Salzgitter plant does not confirm this strategy; it merely marks the start.
Verkor faces a different challenge.
As a newer player in the industry, its task extends beyond just ramping up lines. Production pressures will rise as the company builds operational strength.
This is the most challenging phase for any industrial firm. Initial optimism fades as reality sinks in and financial constraints tighten.
The years 2026 and 2027 will reveal whether Verkor becomes a large-scale manufacturer or turns into a cautionary tale.
I don't think anything definitive can be concluded at this point.
Why AESC stands apart
AESC is often compared to European gigafactory projects, but that comparison is misleading.
AESC expands an existing industrial model into new locations (France and expansion in the UK). With over a decade of operating history and multiple ramped factories globally, AESC enters Europe with a fundamentally different risk profile. Its challenges are local adaptation, workforce scaling, and supply integration.
It applies to CATL's plants in Hungary and Spain.
This difference is essential. Experience builds on itself, while inexperience tends to lead to mistakes.
The real European divide
The key split in Europe’s battery scene comes down to how ready projects are to execute.
On one side, projects are trying to build battery manufacturing for the first time, facing pressure to cut costs, government scrutiny, and high expectations.
On the other side, there are operators with experience, established processes, and institutional knowledge.
2025 highlighted this divide.
The US and China show different lessons
The United States saw a different signal in 2025.
EV demand slowed, while ESS demand grew faster. Battery makers capable of flexibility shifted production. Those tied to narrow customer expectations struggled. Success depended on portfolio adaptability, not just on technology choices.
China continued to expand while managing consolidation pressures.
Capacity utilization became key as margins shrank and smaller firms exited. This is industrial gravity in action.
China has already gone through the learning curve for execution, while Europe is just starting. That’s why Chinese battery companies compete on cost, speed, and reliability. They’ve earned that advantage.
What 2025 really told us
Europe is now facing the consequences of assumptions made years ago.
Assumptions about ramp speed, yield progression, labor availability, supplier readiness, and capital tolerance were incomplete. Once production begins, these incomplete assumptions quickly become apparent.
Why 2026 will feel different
Announcements won’t define 2026. Instead, it will be shaped by scrap rates, unplanned downtime, supplier renegotiations, workforce turnover, capex deferrals, and quiet scope reductions.
This is the industrial reality asserting itself.
Some projects will adapt to these pressures and improve. Some will stall. Some will require restructuring. None of this will be apparent in press releases.
The orientation shift readers need to make
If you’re monitoring the battery industry through capacity targets, technology roadmaps, or policy announcements, you’re already behind.
The focus now is on operations.
Who is learning the fastest, reducing variance, stabilizing throughput, and quietly narrowing ambitions to survive?
2025 marked the year Europe entered that phase. 2026 will determine who remains there.
One thing to stop assuming
Opening a factory begins the exposure phase. Everything that follows matters more than everything that came before.
If you find this kind of analysis useful, you may also be interested in two standalone resources I’ve built alongside the newsletter.
Hi Christopher, Many thanks for the note, always to the point !. It seems there is another level of risk for nascent GF's you have not expended too much on. Newly established Gigafactories in Europe have signed off-take agreements that seems to be providing poor certainty or guarantee overall. Apart from VW and Powerco example , OEM are still shifting and navigating their technology roadmaps on chemistries and formats, in an uncertain market they are still trying to understand. GF's often have a single chemistry they try to master at scale, in one cell format (imposed by customer) they are trying to produce. How are both GF's and OEMs confident this is the right product ? And for how long...?
What about Group14.technologies in the US and a "silent" plant now in Germany?