IPCEI Batteries: Europe’s €18 Billion Battery Manufacturing Program

The Important Projects of Common European Interest for batteries — EuBatIn I and EuBatIn II — represent the largest state-aid-exempt industrial programs ever approved by the European Commission. Together they mobilize over €18 billion in public funding and €35 billion in private investment to build a complete European battery manufacturing ecosystem from raw material refining through cell production to end-of-life recycling. France is the program’s primary physical manufacturing hub, with the ACC gigafactory in Hauts-de-France as Europe’s most strategically structured battery investment.

Why Europe Needed Battery IPCEIs

In 2018, Europe had no large-scale lithium-ion battery cell manufacturing capacity. Every EV battery — in Volkswagen, BMW, Renault, Stellantis, and Volvo vehicles — came from South Korea (Samsung SDI, LG Energy Solution, SK Innovation) or China (CATL, BYD). The European Commission’s analysis was unambiguous: this was a critical strategic vulnerability.

Two structural barriers prevented pure market solutions:

Capital requirement: A single 10GWh gigafactory requires €1.5-2.5 billion in upfront investment before generating any revenue, combined with a 3-5 year ramp-up to profitability. No battery startup could raise this at acceptable terms without policy certainty; no automotive OEM wanted to cross-subsidize a competitor’s supply chain.

State aid constraint: Without IPCEI, EU rules prevented coordinated national support — Germany could not give €800M to a battery company while France simultaneously gave €600M to a competing venture without triggering single market competition violations. IPCEI resolved this by creating a collective exemption for the coordinated value chain.

EuBatIn I: July 2019 — The Template-Setting First IPCEI

European Battery Innovation I was approved July 9, 2019 — the first IPCEI approval in any sector since the framework’s creation, establishing the institutional template for all subsequent IPCEIs (hydrogen, semiconductors, cloud, health).

Structure:

• 7 EU member states: France, Germany, Belgium, Finland, Italy, Poland, Sweden
• €6 billion total public funding
• €14 billion private investment catalyzed
• 17 direct corporate participants
• Value chain: mining and refining → cathode and anode materials → electrolytes and separators → cell manufacturing → module and pack assembly → battery management systems → recycling and second-life

French participants in EuBatIn I:

Saft (Bordeaux, wholly owned by TotalEnergies since 2016): France’s most significant EuBatIn I participant. Saft’s EuBatIn I role was advancing beyond lithium-ion — specifically solid-state electrolytes and next-generation anode chemistries (silicon-graphite composites with higher energy density than graphite alone). Saft’s research center in Bordeaux, alongside its aviation and defense battery manufacturing, positioned it as the natural French participant for high-performance, non-automotive battery applications. Commercial products by 2023: aviation batteries (supply to Airbus for electric APUs), defense energy storage, and industrial uninterruptible power systems.

CEA-Liten (Grenoble, part of CEA research complex): The applied energy research laboratory within France’s Atomic Energy Commission contributed battery materials science and electrochemistry research, providing a public research foundation for commercial participants’ IP development.

Umicore France (operating from its Belgian hub but serving French industrial customers): Cathode active material (CAM) production — the single most expensive component in a lithium-ion cell, typically representing 35-45% of cell cost. Umicore’s NMC (nickel-manganese-cobalt) cathode materials supply the European cell manufacturing ecosystem.

EuBatIn II: January 2021 — The Gigafactory Program

European Battery Innovation II was approved January 26, 2021. At three times the scale of EuBatIn I, it is the largest single IPCEI ever approved.

Structure:

• 12 EU member states
• €12 billion total public funding
• €21 billion private investment catalyzed
• 42 direct participants
• 700+ indirect participants (equipment, materials, services supply chain)
• Full value chain including battery recycling and second-life applications not covered in EuBatIn I

ACC: France’s Flagship Battery Investment

Automotive Cells Company (ACC) is the centerpiece of France’s EuBatIn II participation and the most strategically sound battery gigafactory project in Europe. The joint venture structure that defines ACC’s resilience:

Shareholders: Stellantis (27% — Peugeot, Citroën, Opel, Fiat, Jeep EVs), TotalEnergies/Saft (27%), Mercedes-Benz (27%), and public shareholders via France 2030 equity instruments (~19% including Bpifrance, BNP Paribas Développement, and regional investors).

Gigafactory footprint:

• Billy-Berclau/Douvrin, Pas-de-Calais (France): 13GWh Phase 1, 40GWh ultimate. First commercial cells Q1 2025.
• Kaiserslautern, Rhineland-Palatinate (Germany): Under development.
• Termoli, Campobasso (Italy): Under development.

Technology: NMC (nickel-manganese-cobalt) chemistry in Phase 1, with a development roadmap toward higher-density chemistries (high-nickel NMC, silicon anode) in Phase 2 and beyond.

Total investment across three sites: €7 billion+. Total public support: Approximately €4 billion across France, Germany, Italy, and EU institutions.

The structural logic of ACC’s design — OEM co-ownership providing guaranteed offtake, diversified national footprint securing multiple IPCEI state aid allocations, and TotalEnergies providing energy transition credibility — proved its merit when Northvolt’s pure-play model collapsed in November 2024.

Verkor: The Dunkirk Bet

Verkor (founded 2020, Grenoble) is not a direct EuBatIn II participant but represents the complementary strand of France’s battery strategy. The company secured France 2030 national competition funding alongside IPCEI-adjacent support:

• France 2030 grants and equity: approximately €850M combined
• Series B: €250M (2022, Renault anchor)
• Series C: €2B+ total (2023, EQT, Renault, Bpifrance)
• Site: Dunkirk industrial zone, 16GWh Phase 1
• Anchor customer: Renault (Renault 5 EV battery cells)
• First cells: late 2026 (target)

Verkor’s differentiation: the company positions itself as a technology-forward manufacturer, targeting next-generation cell formats (4680-equivalent cylindrical cells) earlier than ACC’s more conservative NMC pouch cell approach.

ProLogium Technology: The Foreign Investment Prize

Taiwan’s ProLogium — a solid-state battery pioneer — selected Dunkirk for its €5.2 billion European gigafactory, making it the largest foreign industrial investment in France in decades. ProLogium is not a direct IPCEI participant (as a non-EU company), but France’s IPCEI infrastructure, the Dunkirk low-carbon energy zone (nuclear-backed competitive electricity), and France 2030’s financial package were decisive factors cited by ProLogium CEO Vincent Yang over competing bids from Germany and Poland.

The Northvolt Lesson: Structure Matters

Northvolt’s November 2024 bankruptcy — after consuming $10+ billion in capital — is the defining cautionary tale for European battery strategy. The failure is instructive:

Demand risk: Northvolt’s business model required EV sales to grow at 2021 projections. When European EV sales flattened in 2024-2025 (affordability constraints, charging infrastructure gaps, consumer hesitation), orders from BMW and Volkswagen were reduced. Northvolt had no structural protection against customer optionality.

Ramp-up complexity: Achieving consistent quality and yield at gigafactory scale proved far harder than projected. Northvolt’s Skellefteå factory ran at approximately 25% of target capacity for extended periods.

Cost structure: European manufacturing costs — labor, energy, compliance — were structurally 30-40% higher than Korean and Chinese competitors, making cost parity without technological differentiation essentially impossible.

Why France’s structure is different:

• ACC’s OEM co-shareholders (Stellantis, Mercedes) have no rational incentive to let ACC fail — their own EV programs depend on battery supply
• France’s nuclear electricity grid provides competitive, stable energy costs (battery manufacturing is intensely electricity-intensive)
• France 2030’s milestone-based disbursement protects public capital from manufacturing ramp-up risk

The Battery Recycling Dimension

IPCEI Batteries explicitly covers end-of-life recycling — a dimension often overlooked in gigafactory coverage but critical to European resource security:

Eramet (Paris, Euronext-listed): Manganese and lithium battery materials. IPCEI participation for lithium refining from hard rock lithium and battery recycling streams. France has no domestic lithium mining but could become a significant lithium refining hub from imported ore and recycled batteries.

Orano (Paris, formerly Areva): Nuclear fuel cycle expertise pivoting to battery materials. IPCEI and France 2030 support for lithium and cobalt recovery from end-of-life EV batteries.

The EU Battery Regulation (effective 2025-2030 phases) requires rising minimum recycled content in new batteries — 6% cobalt, 6% lithium, 10% nickel by 2031. France’s IPCEI recycling investments are positioned to meet this regulatory demand.

2026 Status and Outlook

A potential EuBatIn III round — focused on next-generation solid-state and sodium-ion chemistries — is under early Commission consideration for 2026-2027. France would participate with Saft (solid-state), Verkor (next-gen chemistries), and emerging players.

Key Statistics

Related Content

• IPCEI Hub
• Electric Vehicles Sector
• ACC (Automotive Cells Company) Profile
• Verkor Profile
• Battery Gigafactories France
• EV Funding Tracker
• Battery Recycling France