Companies Already Pivoting From Europe To US For New Lithium Battery Gigafactory Projects

Some companies which were previously considering Europe for lithium-ion gigafactory projects are now looking to the US instead, executives working in site selection and design have told
As has written extensively, over the course of 2022 the picture changed significantly for Europe and the US’ respective gigafactory investment climates.
Post-Inflation Reduction Act (IRA), growth in planned US production capacity started to outpace Europe’s, leading major EU policymakers to call for action to ‘to prevent an outflow of investment’ from its battery ecosystem.
What hasn’t been as concretely clear is whether these are due to respective ramping up and down of existing plans or the US taking investment away from its North Atlantic neighbour, but experts working in site selection and evaluation for gigafactories tell us this is definitely happening.
One of those is David Verner, executive VP for Industrial Market, i.e. manufacturing, at architecture and engineering firm Gresham Smith.
“One client that we’ve been helping with a gigafactory site evaluation process was initially looking at doing a project in Europe and that transitioned to now doing a project in North America. I don’t think it means the European project is off the table, it’s just the order of precedence has been reversed,” he said.
“That client saw the Inflation Reduction Act coming and shifted gears. I have had a lot of conversations with clients who are accelerating their plans in the US.”
Another is JLL, one of the world’s largest commercial real estate companies, which recently did the site selection for Turkish firm Kontrolmatik’s US gigafactory, which will be focused on the energy storage market. asked JLL’s International Director Meredith O’Connor if the firm was starting to see interest from companies which previously were looking at launching projects in Europe, but have pivoted to the US in light of the Act and lower power prices.
“Yes, we have a global EV steering committee, so we often compare the amount of projects in each country. There has been a rapid increase in battery and solar related projects since this summer. Our JLL team is working on several of them across the United States,” she said.
High power prices in Europe were cited as a reason for a potential delay to the third gigafactory from Northvolt, one of the leading companies in Europe’s gigafactory drive, which at the start of the year looked miles ahead of the US’.
JLL estimates a 25-35% increase in the volume of gigafactory projects since the Act was passed, in line with figures from Benchmark Mineral Intelligence provided to at the start of December 2022. Benchmark then pegged Europe’s 2031 planned annual lithium-ion battery production capacity at 1,186.2GWh versus 992.6GWh/957.6GWh for North America/US.