Following substantial public and private investment, European battery production is taking concrete shape. Manufacturers such as Verkor and Automotive Cells Company (ACC) have either started operations at their first gigafactories or are intensifying production. These developments, complemented by investments from European car manufacturers, are intended to reduce dependence on Asian battery producers and secure the future of the European automotive industry. However, recent experiences illustrate that building a competitive battery industry goes beyond merely constructing factories.
Examples such as Northvolt's insolvency after financing problems and ACC's adjustment of its expansion plans underscore the complexity. ACC has temporarily put planned battery plants in Germany and Italy on hold to focus on expanding French production. This situation does not signal the failure of the European battery strategy, but rather highlights the need for industrial know-how, competitive energy costs, long-term financing, reliable customer relationships, and secure access to raw materials.
While discussions about production capacities dominate, the issue of raw material supply receives less attention. Graphite, an essential anode material for almost every lithium-ion battery, is of central importance here. Despite its significance for electric vehicles and large-scale stationary storage, which cannot function without graphite, it often remains in the shadow of lithium, nickel, or cobalt. Europe's dependence on foreign suppliers, particularly for the downstream processing of graphite, which is heavily dominated by China, represents a strategic vulnerability. The International Energy Agency (IEA) predicts a significant increase in graphite demand in the coming decades.
The European Union has recognised this challenge and initiated measures through the Critical Raw Materials Act to strengthen domestic extraction, processing, and recycling of critical raw materials. The aim is to minimise dependence on individual supplier countries. At the same time, Europe is relying on international partnerships to source strategic raw materials under comparable environmental, social, and governance standards. A strategic partnership with Canada since 2021 promotes investment and the integration of supply chains for energy-politically relevant minerals.
One example of the necessary raw material development is Focus Graphite's Lac Knife project in Québec. The feasibility study indicates average mineral reserves of approximately 15% graphitic carbon, making it one of North America's highest-grade advanced graphite deposits. A high ore grade means that less rock needs to be mined and processed to obtain the same amount of graphite concentrate. This significantly reduces energy consumption, processing effort, and operating costs. Focus Graphite has already been able to produce graphite concentrate with a carbon content of up to 98.7% through mechanical flotation using a pilot plant. This underscores the importance of the upstream raw material chain for overall battery production in Europe.
