The European Commission has initiated a new funding call offering up to €1.5 billion in interest-free loans to companies producing electric vehicle (EV) battery cells within the European Economic Area. Aimed specifically at the critical ramp-up period between initial production and commercial scale, these loans seek to ease the financial burden that manufacturers face before generating stable revenues.
Financed by the EU Innovation Fund through revenues from the Emissions Trading System, the aid targets the phase of industrial scale-up identified by the Climate Commissioner as the most capital-intensive. Under this program, loans can cover up to 60 percent of eligible project costs, with a ceiling of €500 million per beneficiary. Projects must already have entered the ramp-up stage and produce battery cells suitable for EVs to qualify. Applications are due before the end of September.
European battery producers have struggled recently amid global competition and market setbacks. Several notable cases highlight the challenges: Sweden’s Northvolt went bankrupt, Porsche shuttered its Cellforce venture, and the Automotive Cells Company canceled planned factories. Other firms like Volvo Cars’ Novo Energy and Norway’s Morrow Batteries have also faced financial difficulties. Meanwhile, Chinese manufacturers dominate over 80 percent of global battery production, compelling European automakers to rely heavily on Chinese suppliers for cells and technology.