Although they are co-developing ESS solutions together, Northvolt’s senior director of ESS business development Wilhelm Löwenhielm was discussing the broader battery manufacturing ecosystem in Europe, while Fluence’s senior director for strategy, market development and policy (EMEA) Julian Jansen was speaking in response to a question about when it would bring ESS assembly to Europe.
Fluence: “right signals needed” to bring ESS production to Europe
“Fluence wants to be more responsive to customers and increase the speed to market for our product. So we have to consider the value of increasing our regionalisation of the supply chain,” Fluence’s senior director for strategy, market development and policy (EMEA) Julian Jansen told Energy-Storage.news.
He acknowledged the European Union and member states see battery-based energy storage as a critical technology and that many options were available to it to support growth in local value chains.
“The strategic direction is clear, but it comes down to volume, ease of doing business, and how quickly we can set up manufacturing. And those things are then considered and thought about in the context of competitive framework. As a global company, we have a flexibility here, but of course we want to get closer to our customers and we need to start seeing the right signals at a European and at a (EU) member state level to encourage that,” Jansen said.
The firm has already moved some ESS assembly to the US market through a contract manufacturing facility in Utah last year though, as Jansen pointed out, there are direct benefits through the domestic content investment tax credit (ITC) adder to this, whereas nothing equivalent exists in Europe. Most sources Energy-Storage.news has spoken to don’t expect something similar to be enacted in Europe anytime soon either.
Northvolt sounds note of caution, citing solar example
Meanwhile, Northvolt’s senior director of ESS business development Wilhelm Löwenhielm, in response to a question about Europe’s response to the Inflation Reduction Act in the US, said:
“To build up a clean energy manufacturing ecosystem in Europe you are competing with the US, but you’re also competing with what China can bring to the market. At Northvolt, we are all about a level playing field but not about restricting trade to any great extent.”
“The price of solar panels has dropped by 25% in Europe since the beginning of the year, and the continent’s emerging solar manufacturing industry is having to stockpile its inventory because it’s being forced to sell at below cost, because a lot of the panels that were destined for the US have been redirected to Europe.”
“We are still at the very early, sensitive stage of building out the battery manufacturing capacity in Europe and if there isn’t a level playing field it’s really going to hurt the prospects of the European battery industry.”
The Inflation Reduction Act and its generous tax credit incentive for upstream and downstream clean energy has seen a boom in investment in the US and it now has more planned lithium-ion manufacturing capacity than Europe, a drastic shift from the situation before the Act made its way through the US’ legislative processes.
A trade body for the automotive sector in Europe said earlier this year that as much as two-thirds of planned European gigafactories were at risk of delay, cancellation or downsizing due to this.
Northvolt recently announced its sixth lithium-ion value chain manufacturing facility, in Montreal Canada, set to commence operations in 2026.
Emblematic of this is Tesla’s widely-reported decision to not yet produce battery cells at its new gigafactory in Berlin, despite it being ready to do so, but instead to produce battery packs using cells and modules imported from its US and China facilities.